What Should You Do When Crypto “Peaks”?

Swinging to the top is an extremely popular concept in the crypto market when you buy an altcoin and the altcoin price quickly divides by 2, 5, and 10 times. However, the handling of peak altcoins has not received much attention from investors. In this article, I will share how everyone should handle the situation when they get hit.

I have a number of articles sharing knowledge that people can refer to such as:

• Development Roadmap for a Newcomer Entering the Crypto Market
• 7 Steps to Complete Fundamental Analysis of a Crypto Project
• Don’t Run Away or Hate! Let’s Accept Ponzi & Tech Pie

Why Are We Swinging to the Top?

What is peak swing and what are the benefits?

Swinging to the top is a popular concept in the Crypto market that refers to the fact that after you buy a coin/token and hold it, the price of the coin/token continuously decreases, causing the investment to be divided five-to-seven. Normally, anyone participating in the crypto market has experienced this peak situation a few times.

Financially, swinging to the top is not beneficial for any investor and no one wants to swing to the top when investing. However, if looked at from a more diverse perspective, swinging to the top also has a number of benefits such as:

• Swinging to the top comes from FOMO, so the faster and stronger a crypto project increases in price, the more people will swing to the top. Money will move from those with money to those with knowledge. This is a truth that needs to be accepted in the financial market. Zero Sum Game!
• Swinging to the top makes investors really need to look at themselves and choose the right direction for themselves. Become more mature.
• Those who swing to the top but do not have the knowledge will continue to hold coins/tokens without selling. This is essentially beneficial for the project and the VCs selling their tokens.

And before we go into ways to solve the problem of peak swings in the crypto market, we must acknowledge the reasons why we are caught in that situation.

The essence is lack of Knowledge

For all financial markets, everyone understands that in order to invest, you need knowledge, but to learn knowledge, you encounter problems such as information disorder, disorientation, not knowing where to start,… from there leads to a number of situations such as:

• Listen to many KOLs, groups and communities share bets and then go all in. Follow any bet without understanding. Take Profit or Stoploss is also given to KOLs and community owners. Your job is to enter orders without thinking about anything.
• Buy according to luck factors, also known as spirituality, such as beautiful logos, good project names, good vision,…
• Buy based on simple factors such as a project with a good backer, a good team, good technology, long-term vision, uniqueness,…

Knowledge is the core of every problem. If you don’t have knowledge, you won’t be able to do anything, even boil eggs. We have to admit to each other that even the job that helps you earn a salary every day, every month requires knowledge, but you enter the crypto market wanting to become a millionaire but don’t learn it.

Everyone knows that obviously, but not everyone accepts that lesson. People still hope that KOLs will be good and help them make money. Remember that when you were in preschool and KOLs were just learning to read a, b, c,… you were already good at asking questions.

If you have knowledge, you can still swing to the top as usual

Like the problem above, there is knowledge but it is also classified into many levels. Simply boiling eggs for those who are not familiar with it is simply turning on the stove and waiting for about 10 minutes to eat, but for those with a little more knowledge, they know how to boil it according to the formula 3 -6 -9. So if you are the first person, you may be able to boil eggs but it may not be delicious.

In the Crypto market, too, there is knowledge, but how deep the knowledge is and how it can be practically applied is divided into many different levels. Some levels include:

• Level 1: Learn basic concepts such as what is Crypto & Blockchain, what is DeFi, what is AMM, what is Yield Farming, what is Lending & Borrowing, what is NFT,…
• Level 2: Read and understand. At this level you have the ability to read and understand all market knowledge from fundamental analysis, market monitoring, information updates,…
• Level 3: Read and understand deeply. At this level you will have a deeper perspective on the market such as the project’s operating mechanism, how the project captures value for native tokens, how this trend is operating,…
• Level 4: Read, understand deeply and project. After having quite in-depth knowledge of the market from current things, you can start to make market predictions such as what will happen next, what trends will continue to explode,…
• Level 5: Read, understand, forecast and invest. At this stage you are ready to bet your money on your personal knowledge and projections.
• Level 6: Read, understand, forecast, invest and experience. At this stage you will have to learn from both failed deals and successful deals. How to minimize failure and increase the likelihood of success.

Usually people skip levels 1, 2, 3, 4 and only do part of level 5 which is investing. With such actions, it is clear that swinging at the top is normal. Even the best people fall to the top, as you can see that many large investment funds have lost money with the market when investing in 2021.

However, what makes the difference between professional investors and newbies in that market is how they handle those peak swing investments?

What to Do When Swinging to the Top of Crypto

Accept the loss

Acceptance is the most difficult thing for investors. When they lose money, they lose their reason and are engulfed in negative emotions, they go to the project, the development team and say bitter words. Since then, they have become extremely toxic investors, believing that everything is a scam and a scam.

There are people who are gentler, but the consequences are no less. They ignore losing investments and silently hope like “toss it and see if the uptrend returns later”. Normally, investors will behave like that, but in the crypto market, 99% of projects will not return to their old peak in the next cycle.

That’s why we must have some positive and correct psychology as follows:

• Accept that we have lost money on this investment. Consider it a common thing when investing in venture capital.
• Understand that there is no point in toxicizing the project. That doesn’t help our account grow again and it’s just like we’re collecting trash for our house.
• Keep a positive mentality to enter the stage of finding out the cause.

Analyze causes and draw lessons

At this point, we need to seriously review ourselves to see what is the real reason why we are losing money. Don’t be afraid to accept your own weaknesses because if you don’t accept your weaknesses, you certainly won’t be able to change them. Below are some of the causes and lessons learned.

Reconsider your project and swing it to the top

Many people let the project drift and hope it will return to shore, but this is almost as bad. We need to research and answer some of the questions below:

• What is the general market situation like? Is the market in an uptrend? Is it in a downtrend or in a sideways and accumulation phase? It is imperative to make your own projections to have further plans.
• Is the project in development? What has been updated in the project recently? How do these things affect the project? In the short, medium and long term, what will the project upgrade? How does that affect the project?
• Which segment does the project belong to? Can this segment become a market trend in the future? Why can it become a trend and lead the trend?
• What stage is the project’s tokenomics at? Have the VCs and Core Team been paid? How do their prices compare to current prices?

Come up with a next plan

By answering the above questions, we can make many different decisions based on personal finances, market trends, etc. including:

• Selling the entire project because the project no longer has potential.
• Selling part to continue observing the project.
• Continue to hold.
• Continue to hold and DCA at the prices you forecast.

When you make a decision, you don’t need to hesitate and think too much. Some thoughts may arise in your mind such as: “If you sell it and don’t know if it will increase again?”, “What if next season it comes back to break the old peak?”, “I think it’s okay for the team.” They don’t work much but they are still talented people”…

Restructuring an investment portfolio is a painful thing, so let’s use logical thinking more than emotional thinking.

Act

The key word here is “discipline”. Once you have a plan, you need to be disciplined in following your own plan. However, besides discipline, we still need flexibility.

For example: At the time when we decide to restructure the portfolio, we see that the project is still working and has the ability to grow again in the future. We propose a plan to continue holding and DCA at reasonable prices.

However, 2 – 3 months later we see that the project’s upgrade has no effect in attracting users and increasing revenue, then we have to come up with a new plan. The crypto market is always changing holdings and a fair price DCA will often hold true for BTC and ETH, but with altcoins the plan is very susceptible to change

Summary

Swinging to the top in the crypto market is a very normal thing. You don’t need to be embarrassed and worried every time this happens. The important thing is to confidently face and handle it. After each peak you will become more mature.

Failure is mother’s success. However, don’t have too many mothers. Don’t bathe in the same river twice.