Crypto Update: Massively Profit from This Year’s Altcoin Season
On our January 25, 2019 crypto update, we revealed how a strong altcoin season may be on the horizon. At the time, many were still bearish in crypto and only a handful of altcoins were showing signs of strength. More than two months later, almost every altcoin has pumped or is about to. Needless to say, the altcoin season is upon us.
With the most profitable season in crypto underway, it would be a shame if you failed to take advantage of it. That’s why we’re here to show you how can supersize your Bitcoin stack without getting caught in the wild swings. In this article, we reveal how you can massively profit from this year’s altcoin season.
Never Buy the Pump
Before you partake in this season’s bonanza, please do yourself a favor and promise to never enter the market because of the fear of missing out (FOMO). This is a surefire way of lose your money in a bullish environment.
When an altcoin is pumping, there’s a very good chance that it can correct at any given moment. Take for example Basic Attention Token (BAT/BTC). It took out resistance of 0.00006 on March 28. If you bought the pump around 0.000075 thinking that the price will still go higher due to the massive breakout, you would be down by around 10% now with the market trading at 0.000067 levels.
Daily chart of BAT/BTC
Never buy the pump. We know that this is easier said than done, especially if you see bulls buying up positions so fast. This can lure you to press that buy button out of impulse. If you start to feel that way, just walk away. Your future self will thank you for it.
Markets always pullback regardless of how strong they look. You are likely to get a good buy price during these pullbacks and this leads us to our next point.
Buy the Retest of Support
When a market takes out the range resistance, it will attract momentum traders and trend followers. As a result, the market can post serious gains in a relatively short period of time. The pump may look extremely bullish but keep in mind, those who bought at the bottom will likely take advantage of the rally to take profits.
As bottom pickers dump their positions, there’s a very good chance that the market will revisit the range resistance or the breakout point. If bulls manage to flip it into support, that’s when you press the buy button.
Take for example Stellar (XLM/BTC). It breached resistance of 0.000025 and climbed as high as 0.00002978 on March 18. Eventually, the breakout rally faded as bottom pickers took profits. Consequently, the market dropped down to 0.000025 on March 26.
Stellar daily chart
Notice how the market quickly bounced when it touched 0.000025. This is a strong signal that bulls have taken control of the market.
Buy the Continuation
Not all breakouts will eventually lead to the retest of the former resistance. Some markets are so strong that they will consolidate above it. This can lead to bullish continuation patterns like bull flag or the bull pennant.
Litecoin’s (LTC/BTC) recent price action is a prime example. It took out resistance of 0.0989 on February 8, but people were so bullish that they bought every dip. As a result, the market printed a bull flag with support of 0.0113.
LTC/BTC daily chart
One important thing to consider when buying consolidation patterns is the volume. You should see a significant decline in volume from the breakout as the market consolidates. This is a sign that sellers are losing ammunition. When you see volume becoming anemic, closely watch the market. The time to buy is when bulls take out the resistance of the flag or the pennant.
Lastly, don’t forget to set your target prices and take profits. You can do this by calculating the size of the pattern. Once you get that figure, you add it on top of the breakout point to set your target price. Let’s use Cardano as an example.
The market printed an inverse head and shoulders pattern, as it traded between 0.000009 and 0.000013. Thus, the size of the structure is (0.000009 – 0.000013) 0.00004. You add that on top of the resistance (0.000013 + 0.00004) and you get 0.000017 as your target price.
ADA/BTC daily chart
With the altcoin season in full swing, those who did not give up on crypto should benefit from this very profitable season. Just follow the tips here and you’re likely to massively profit from this year’s bonanza.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.