The problem with trading stocks / crypto
As always I'll begin this article by warning readers about the dangers of trading, either in crypto or in the traditional stock market. There are no certainties in trading, and for every story of someone making their fortune there are twice as many tales of people losing everything! The reason why people always say "only invest what you can afford to lose" is to stop people investing capital that they need to survive (rent / food / medical bills etc.). The stock market is the 'biggest casino in the world' and there are no sure fire investment strategies that will ALWAYS show a profit. The best traders out there have around a 60% success rate, so even if you're very good you'll likely be wrong 40% of the time. For more information about the risks, please read this post of mine from March 2024 : $HIVE and the Relative Strength Index (RSI) : cracking the code on trading?.
High Cap Coins - low risk
However I do always maintain that it is not impossible to invest successfully, as long as you're doing it safely, not over investing with money you need to survive, and always looking at your risk tolerance. If you're someone who likes 'little risk' then you should be buying / trading the higher market cap crypto coins, such as $BITCOIN (duh!), $ETH, $MATIC, $LTC, $DOT, $ADA, $BNB, $SOL, $XRP, $DOGE...to name a few. These are the coins with the highest Market Cap (Supply x Price) and will therefore suffer from the least volatility. They also tend to be the cryptos that move first when the market (Bitcoin) starts to go up. However they aren't likely to go 100x any time soon, for those gains you'd need to look at lower cap altcoins and, dare I say it, memecoins.
Low Cap Coins - high risk
If you're investing in memecoins such as $PEPE, $FLOKI, $WIF then you should be looking to take profits where you can, as these coins are the biggest gamble and offer no real use-cases...they are clearly inspired by the success of $DOGE and $SHIBA. Their price increases (which have been huge over the last few months) rely on people buying the coins simply to make money on trades, they have no real crypto use-cases and are going up because they're trending and trying to be the 'next Dogecoin'. Smaller cap altcoins, such as $HIVE - currently rated #332 by market cap on CoinMarketCap.com - have the potential to grow but are also riskier to invest in than high mcap crypto coins, as they are more volatile so can go up or down a lot more than $BITCOIN and the other 'big altcoins' on the market. So without further ado, let's take a look at $BITCOIN and $HIVE to ascertain what is currently happening the in crypto markets.
Bitcoin Charts - holding the 99-day Moving Average
Bitcoin has been climbing steadily since it's low of $15500 in November 2022. Anyone who bought there would be up 4x at the current Bitcoin price. Amazing gains! However some of the altcoins out there have done a lot better, such as $SOLANA which had a low of just $8 (December 2022) and has peaked this year at $210, over 26x from the low! Solana is the 'golden child' of crypto at the moment and no large cap altcoins have come close to it's success over the last year.
So why invest in $BITCOIN? Well, Solana might be pumping this year, but remember it dropped from $250 in November 2021 (it's all time high) down to just $8 in December 2022...a LOSS of 31x. Over the same time period $BITCOIN lost around 4.4x of it's value. So Bitcoin holds it's value better than any other cryptocurrency on the market, it is by far the most stable of all cryptos out there. As the ultimate 'store of value' it is the safest crypto to invest in, but tends to move slower (up or down) than the altcoins out there, both high cap and low cap. So where does $BITCOIN go from here?
While I can't predict the future, I can look at the charts and offer some good news on the daily charts (each candle = 1 day of time). Bitcoin has held the 99-day Moving Average (thick blue line) after briefly dropping below it a few days ago. Moving average lines act as support when we are above them, and resistance when we are below them, so it is a good sign that we bounced back so quickly. I do worry that there might be a 'shake out' coming, where some of the big institutional investors try to crash the price of $Bitcoin so that they can expand their positions (buy more $BTC). However right now $Bitcoin is trending upwards, so there is no reason to panic. My recommendation for investing into $Bitcoin is to dollar cost average in, buying a small amount when you can afford it and trying to increase your position over the long term, rather than worrying about the price today or even this year. If we believe that $BTC will continue to go up then we can consider the price in 5 or 10 years, and try to build your investment 'bag' that will grow with it. If you're more of a trader, you might try to 'time to market', selling your $BITCOIN when you think the market has reached it's top, and buying it back again when you think it's reached the bottom...this technique obviously takes some trading skill AND experience in crypto market cycles, but would be the most profitable strategy over the long term.
$HIVE still in the 'Buy Zone'
In December 2022 we saw $HIVE hit it's cycle low of $0.25, but more recently it dropped to around $0.26 (September 2023). Using 'Fibonacci Retracements', the colourful boxes in the picture below, you'll see that the Grey Box (and Blue below it) always serves as a 'safe buy point' for $HIVE, giving it a lot of support over a short time frame. While there are no certainties in trading, these areas of support are about as safe as you can get when doing a Technical Analysis : when $HIVE breaks into these support levels it seems to always come back out of them, so we call this the 'accumulation zone'. This is good news for $HIVE holders, having these areas of HEAVY support, as well as $HIVE investors who want to buy at a low price with a lot of support. This is probably a good time to increase your $HIVE holdings, but I'd also keep an eye on the $Bitcoin charts as $HIVE tends to follow Bitcoin very closly and crashes hard when $BTC does. $HIVE's all time high was over $3 in the last confirmed Bull Market (November 2021), so there is a potential for a lot of $HIVE gains over the next 1 to 2 years! As always, invest what you can afford to lose based on your own personal risk profile.
I'd love to hear other people's thoughts on my TA's (technical analysis); I've tried to keep this post as simple as possible so anyone can understand it, so I hope it wasn't too confusing / boring?! I believe we should all be knowledgeable about trading if we're going to 'play in the crypto pool', so even if you're not an active trader I'd recommend educating yourself about charts and crypto trends in general. There are a million more things I'd like to talk about regarding trading / risks / indicators / wider markets / inflation etc. but I think I'd lose most of you if I expanded too much.
If you have any questions or wants to start a discussion please do so in the comments, or pop into the THGaming Discord Server - Marketwatch Channel and let's chat there.
Thanks for joining me in my Gaming and Crypto journey. As always...
Trade safely, Game hard.
THE END
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