This post is aimed at those of you who weathered the bear market of 2018 and perhaps on occasion, bought the dip and or ‘loaded up’ on ALTs during 2017-2018. In all likelihood, you are now holding some cryptos that in hindsight, you would have been better off avoiding.
Your ALT coin portfolio probably falls into 5 categories.
- Looking to Accumulate
- Looking to Sell at the Best Price
- Keen to Sell
- What Was I thinking?
The good news – there’s now ample opportunity to ‘cleanse’ your ALT portfolio in the coming months. The assumption here is that we have entered the early phases of a bull-run.
Let’s go through it.
Looking to Accumulate
The focus today is on crypto you already hold so simply put – buy on the dip relative to BTC.
Nothing to do here. Just ensure you have an exit strategy in place. Remember, if we are at the beginning of an epic bull run, at some point, it will end and ALTS will fall and fall hard.
It’s up to you to have a plan in place to benefit from such a run-up if and when it plays out.
Alternately – note your decision to hold through multiple cycles and put your reasoning in writing – you’ll likely have forgotten it in three to four years….always better to have a written reference as to why you hold an investment.
Looking to Sell at the Best Price
ALTS you no longer wish to hold long-term but which you believe have bull-run potential.
The information given here is general in nature and you will need to adjust it for each particular crypto. For example, if an altcoin has just pumped 20% then you will likely have to wait for a retrace and then target the next price pump.
Place a sell order for the entire position on a 20% pump from the present price.
Place a buy order with all the proceeds from the sale at slightly above the price prior the price pump (roughly +5%).
A) BTC valuation never retraces – congratulations you now hold more of the asset most likely to survive the next decade.
B) Price retraces and you re-enter the market with more of the ALT coin.
Rinse and repeat until outcome A (the price doesn’t retrace). It might be the first time, the 3rd or the tenth.
Keen to Sell
As above, except you take the first exit and stay out of the ALT.
What was I Thinking?
A) Trade out of the ALT you no longer wish to hold for another ALT that has fallen about as much against BTC (accept a 20-30% relative loss) but which you feel more confident about holding. This minimizes the loss taken while shifting your portfolio to ALTS you want to be holding or at least which you have more confidence in.
Now, of course, you will need to do your research and try to match crypto pairs that have fallen more or less the same from the time you bought the ALT you are looking to trade. This is easily done by checking the BTC valuation of both cryptos on the day-week-month you purchased the ALT you wish to trade.
For example, while Ethereum Classic and Ontology have both fallen almost 90% against BTC – I would be far happier holding Ontology than ETC.
Place a sell order below (say 10%) the previous all-time low versus BTC – if it drops get out. Accept the loss and move on. Hard to do but sometimes taking the loss is important – freeing your focus up for more profitable future opportunities.
There’s no rush with any of this. A bull-run will give you ample opportunity to minimize the losses you have incurred with certain ALTS.
Nonetheless, you need to take a long hard look at your ALT coin portfolio if you haven’t already done so and plan how to manage your findings whatever they may be. Simply chasing coin pumps – selling failing/ underperforming coins and buying others that have just pumped will only serve to diminish your capital.