{"id":8760,"date":"2021-09-08T10:14:21","date_gmt":"2021-09-08T14:14:21","guid":{"rendered":"https:\/\/cointelegraph.com\/magazine\/?p=8760"},"modified":"2021-09-08T11:12:55","modified_gmt":"2021-09-08T15:12:55","slug":"sell-or-hodl-how-to-prepare-for-the-end-of-the-bull-run-part-2","status":"publish","type":"post","link":"https:\/\/cointelegraph.com\/magazine\/2021\/09\/08\/sell-or-hodl-how-to-prepare-for-the-end-of-the-bull-run-part-2","title":{"rendered":"Sell or hodl? How to prepare for the end of the bull run, Part 2"},"content":{"rendered":"

To read Part 1 of \u201cHow to prepare for the end of the bull run,\u201d\u00a0click here<\/a>.<\/em>
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\nSo, you\u2019ve made a million bucks this cycle and you\u2019re trying to work out how to transform those life-changing gains into money in the real world before the inevitable crash. <\/b>But at the same time, you don\u2019t want to sell now and miss out on potential upside. So, what should you do?<\/p>\n

For Quantum Economics founder Mati Greenspan, the answer is simple: Be optimistic. He\u2019s not an advocate of trying to time the market.<\/p>\n

\u201cAs somebody who has been trading my entire life \u2014 I mean, way before cryptocurrencies \u2014 you\u2019ll find that it always pays to be optimistic, and pulling out your money from the market has almost never been a good long-term strategy. Not for any market over almost any time frame.\u201d<\/p>\n

Greenspan points out that even those few people who bought Bitcoin at the top of the 2017 bull run are up 250% just three and a half years later.<\/p>\n

\u201cAnybody who was wise enough to foresee the crypto winter and took all of their money out, when do you get back in? Nobody can time the markets to a T. The best we can do is to kind of figure out, given the information that we have, what are the best investments to make over time.\u201d<\/p><\/blockquote>\n

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\"Mati
Quantum Economics founder Mati Greenspan.<\/figcaption><\/figure>\n

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No one can predict the top<\/h4>\n

Unlike Decentrader analysts Filbfilb and Philip Swift in Part 1<\/a>, Greenspan doesn\u2019t believe it\u2019s possible to use on-chain indicators to accurately foresee the end of a bull run. He warns that unexpected events like bad regulatory news from China or a tweet from Elon Musk can occur at any moment, sending markets into bear mode.<\/p>\n

Filbfilb says that this is why good traders don\u2019t just look at one type of data but consider on-chain analysis in the context of sentiment, cyclical data, technical analysis and everything else to gauge where the market is headed.<\/p>\n

\u201cIf you\u2019re sort of sitting around waiting for some on-chain analysis to tell you the answer, and we have a black swan event, you\u2019re not going to do anything about it in time,\u201d says Filbfilb. He adds that even black swan events don\u2019t present major issues for sophisticated traders, pointing out that the March 2020 \u201cBlack Thursday\u201d crash had been foreshadowed for weeks:<\/p>\n

\u201cIf that kind of thing were to happen again, as a trader myself, I would have enough time to take action. I\u2019m in and out of the market all the time.\u201d<\/p><\/blockquote>\n

\u201cFor me, it\u2019s a much more fluid situation. I\u2019ve got other tools, like I know how to hedge. I\u2019ve got other different ways of managing risk, which means I don\u2019t necessarily have to sell my Bitcoin in order to get myself into a position where I can cover any downside risk.\u201d<\/p>\n

Needless to say, it takes a lot of hard work, time and training to be able to play the market like Filbfilb. What about the rest of us?<\/p>\n

Filbfilb recommends taking enough profit to keep yourself happy in the downturn. \u201cIf you\u2019ve made life-changing money, consider changing your life a little bit now. For me, I personally have done that \u2014 I\u2019ve taken some money off the table,\u201d he says.<\/p>\n

\u201cWhat that\u2019s allowed me to do is to sort of be able to hold on for the rest of the cycle, potentially to much higher prices.\u201d<\/p>\n

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Scott Melker is the Wolf of All Streets.<\/figcaption><\/figure>\n

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Profit from profit-taking<\/h4>\n

Scott Melker, also known as \u201cThe Wolf of All Streets,\u201d agrees that taking profits on your trades all the way up is the key to success, whether at predetermined levels or more randomly. \u201cPeople should be taking profit on the way up just as you should be dollar-cost averaging into an asset on the way down,\u201d he says.<\/p>\n

\u201cI\u2019m a firm believer that once your investment has doubled, take your initial investment off the table. So, if it was $100,000, now you\u2019ve got $100,000 to play with, and you have absolutely no risk.\u201d<\/p>\n

This has the added benefit of reducing the chance that you\u2019ll make a big mistake by selling too early, too late or too much, when you believe the top has arrived.<\/p>\n

\u201cYou know, when you\u2019re taking profits, every time you sell something you\u2019re taking the pressure off your future decisions. Which is mentally a very good place to be.\u201d<\/p><\/blockquote>\n

He adds, however, that you are allowed to have diamond hands with your high-conviction, long-term holds. \u201cI buy Bitcoin for my kids \u2014 I am not worried about cycles,\u201d he says.<\/p>\n

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