Bull markets in the cryptocurrency industry can get incredibly volatile. Valuations have been known to skyrocket beyond what many can imagine, especially in the realm of altcoins.
Just for reference, the market capitalization of what back then was a relatively new meme coin – Shiba Inu (SHIB) – reached a whopping $40 billion in October 2021, during the previous massive bull market. Who could have imagined that an obscure meme coin could surpass a number of well-known and established projects in the industry?
But SHIB is just one of the examples. Many altcoins soar to incredible highs, creating a lot of opportunities for those who understand how to play their cards right.
And that’s no walk in the park. The allure of easy money in the cryptocurrency market has been there for as long as the industry has existed, but in 2024, the trading scene has changed entirely.
In this article, we attempt to take a look at some of the most common mistakes traders and crypto investors make and how to avoid them in the next bull market.
If you’re interested in a deeper dive into the 15 must-know trading tips, take a look at our video here:
Table of Contents
Getting Scammed
Mistake number one – not securing your on-chain bags and getting scammed. This is a story as old as time if time was 14 years old.
“This can’t happen to me…” are the famous last words of anyone who thought clicking on the link in the most recent tweet of MicroStrategy’s official Twitter account was going to bank them a fortune. That’s right – even the corporate account of a multi-billion dollar company was recently compromised, leading to some $400,000 being lost to the scammers.
There are countless examples of people with years of on-chain trading experience getting their valuable non-fungible tokens (NFTs) stolen or their accounts being completely drained because hackers got the better of it and managed to trick them.
The unfortunate truth is that it can happen to anyone, and it will happen when you least expect it. And while on-chain security has always been an important consideration, it feels like it’s going to be paramount in the next bull market. Why?
Well, the fact of the matter is that on-chain trading volumes are soaring and are already in the billions. This trend is likely to continue, meaning on-chain security will be of incredible importance.
We have a guide that you must definitely check out, related to keeping your coins safe:
9 Tips for Securing Your Bitcoin and Crypto Wallets
It includes some of the best practices, and it’s worth checking out. Don’t lose your hard-earned coins to scammers.
Chasing FOMO
The fear of missing out, otherwise referred to as FOMO, is a common psychological state where people feel tempted to enter a trade after the price has increased significantly, thinking that the rally is just about to begin.
The important thing to understand here is that it’s completely irrelevant whether or not the price continues going up after you have “fomo’d” in a trade. It’s imperative that you have a clear reason for each trade, and FOMO is never a good one.
Sure, no one is immune to it – you are bound to feel as if you’re missing out on the next big thing at some point. But try not to give in to this emotion immediately. Use it as fuel to dig into the asset and the trade.
Use the FOMO to your advantage and leverage it into finding out everything there is to know about this asset, and then, only then, will you be able to make an informed decision whether to enter the trade or invest in it.
Otherwise, it’s nothing but gambling – sure, you make some money here and then, but chances are that you will be left on the other side of the trade when the chart has ended up looking like Burj Khalifa.
Lack of Clear Targets
Let’s be honest: unless you’re extremely lucky or extremely well-prepared in this market, you won’t retire off of your $1,000 investment into a random altcoin during the next bull run.
That’s not to say that this is not possible – people have made millions from tiny investments in SHIB (and other altcoins) during the last massive rally in 2021, but these are outliers. Holding a position that has made you, let’s say, $10,000 out of a $100 investment turn from opportunistic to irresponsible really quickly, and, at some point, it’s time to take profits.
It’s entirely possible that you hit a home run during a parabolic bull run, but make sure that you have a clear exit strategy prepared for every scenario. Not only that, make sure that it’s a reasonable one.
In the above example, perhaps it’s a good idea to take some money off the table and leave a small percentage to ride the rest of the run (if it even goes on) – that’s the so-called moon bag.
But don’t fumble your profits and roundtrip your massive gains just because you want to retire from crypto at 25. Set clear and reasonable targets and stick to them.
Of course, there are many more things to keep in mind, which include:
- Risk management
- Networking
- Leverage trading and its risks, and so on.
We highly recommend taking a look at the above video, but if you prefer the written guide, find it here:
15 Must-Read Bitcoin & Crypto Trading Tips
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