When it comes to investing in crypto as well as stocks, one strategy for positive returns is anticipating the anticipation of others. Instead of falling under our emotions, either buy on the hype or sell on panic, we should understand what other market participants are doing and try to capitalize on that. While we see institutional investments getting into the space which use fundamental and technical analysis, I think there is a big portion of amateur investors which fall shorter when the market changes direction abruptly. So anticipating what this kind of investors will be doing, can get us the edge for better yields.
Crypto rollercoaster
In order to make money in crypto one way is to guess what other people think is valuable rather than what you yourself think. For example I see no value in meme coins, I've stayed far away from them and yet the market and homemade investors went crazy on them. Some of them got rich, while others got ruined, but for sure there is a lesson to be learned from here. And while that happened, we see over and over again how these meme coins rise and fall clockwise.
Picking a solid crypto project and staying long on it will sure provide positive result, but in the same time paying attention to the "herd" and not fighting the trend can make some serious yields as well. So the next question that comes to mind regarding if to stay in the market is: Sell in may and go away or stay and make hay?
Cycles correlation
There is close relation and analogy between crypto and stocks and what applies to one, proved to have a correlation to the other as well. Derived from stocks based on historical data, the result revealed that the returns from November to April are much higher than the ones between May and October. But in my opinion selling up and buying into the market six months later will come with a premium price.
Staying in the market and in solid projects while others are exiting in May, would get us bigger returns through staking or other rewards systems. Why? Because the rewards pool should split to fewer participants. This can be very well the case on Hive where those that stay and grind when the market is low, make the most returns.
In the same time this cyclicity offers us the possibility to sell in May the crypto assets on which we don't have a strong belief and pour the money into those which we are holding long. This will focus and consolidate the portfolio while keeping the noise away and allowing us to pay more attention and capitalize better on fewer projects.
A conclusion that I can make is that we should teach ourselves a mindset of taking profits. And such yearly cycles, creates us the opportunity to take profits on crypto assets where we don't see a long term vision and switch that cash or portion of it into those where the use cases are real. This is not for the HODLer investor type which cannot apart from any of his or her crypto assets, but is a good strategy to keep money also coming out and consolidating our investments. The crypto space is quite dynamic and being active when the market moves one way or the other simply provides an edge and better results rather than staying away. The only impediment is to have time to manage these cycles (one thing that I am lacking and sometimes gets me late to the party), but the opportunity is there for those willing to grab it. So for me the strategy was to sell some of my assets like Bitcoin Cash, AMPL, FUSD and consolidate my bags of Hive, HBD, Coti and Ada.