Even if you’ve been a smart investor, the bear market tends to really butcher portfolios. That really hurts, but it depends on what kind of action you take. Using a good crypto exit strategy is a crucial part of your trading efforts. However, there are 7 tips to stop losing gains in this bear market. Altcoin Buzz, a crypto Youtube Channel has revealed it and hopes that it can help traders during this hash situation.
Take Profit After Doubling Your Investment
The first tip mentioned in the video is to ask yourself whether you’ve doubled your investment. In case you’ve doubled your initial investment, it may be a good idea to take out the original capital because everything else going forward is going to be pure profit. Make sure you always have available money to buy golden opportunities or dips.
Sell Using Dollar Cost Averaging
The second tip to stop losing gains is to sell using dollar cost averaging (DCA). We often talk about this in terms of purchasing, but the same strategy is just as valuable when it comes to selling. So DCA is a good strategy for investing.
However, it’s also one that works wonders when you want to take profits out the principal idea remains the same effect. In this case, you take out a fixed amount of profits at a regular frequency or maybe set times, it doesn’t really matter how the price fluctuates because you have a structure, and you can make a steady profit exactly the same.
As if you use DCA at the point of purchase, you may also want to check what tax implication your sale may have, a long-term capital gain has a much more favorable tax rate compared to short-term gains.
Re-Evaluate Your Crypto Bag
The next tip is to re-evaluate your crypto bag. Because everyone tells you that before you buy crypto you need to do your own research. But nobody tells you that it’s also very important to re-evaluate your crypto bag in the given market.
It might happen that you purchased some great projects in the bull market and they did well. But they may not be able to make it through a bear market. Whether this bear market or another bear market means you could lose all your money. So you need to ask yourself if a project is either weak or strong before putting it into your bag.
Watch For Wallet Issues
Tip number four is that you should be aware of wallet issues. The first thing is really a variety of issues with your wallet of choice. Since you’re on the top of your game, your funds are on a hard wallet. So the first step is to move your funds from your hard wallet to either an exchange or an app. That’s where you can convert it into fiat and fee for each transaction.
It can happen that the listed transaction fees are wrong. So your transaction can fail entirely, not only did you lose the transaction costs but it also failed and you may miss out on a good opportunity because sometimes, it’s better to overpay. That is the reality, you can avoid this scenario if you use a wallet. However, that allows you to set the transaction fee manually in general native wallets have this option built-in and you need to have enough funds.
Don’t get caught by not having enough of a given coin or having the wrong coin in your wallet. It’s also a good idea to first send a small amount of your crypto. In this way, you can see if everything’s working correctly and you can become more familiar with the system.
Exchange Issues
Tip number five is that we’re talking about exchange issues. The two major issues you may encounter are the fact that they freeze your account or that the exchange has an outage.
A frozen account tends to be a problem for smaller or lesser-known centralized exchanges. However, it can potentially become an issue even with major exchanges as well. A simple reason why you can’t withdraw your funds is the number of required confirmations. So the network may only need one confirmation for the deposit, but once we get down to withdrawals, that number can change.
If you need 150 or 200 confirmations, this may take some time, depending on the arrival time per confirmation. If the exchange does freeze your account it will be for some rules or regulation especially if you have already done your KYC it is most likely just an excuse the reason being that exchanges had an outflow of BTC and ETH like most exchanges had.
Watch Your Bank
Tip number six is to keep an eye on your bank because after getting your crypto off the exchange, the next problem is going to be your local bank. If you start taking out big amounts of money banks have no issues with freezing your account, anything can call suspicious activity opens the shooting gallery for them and banks are pretty nefarious.
You can give your bank a heads up in advance just in case you want to withdraw serious amounts of money. This way, they should have no reason to freeze your account and you’ve established a communication precedent. Another option is to withdraw funds into various accounts. In this way, you spread the risk of having an account frozen and just as with crypto transfers.
Crypto Taxes and Regulations
Tip number seven is to deal with crypto tax and regulation. Make sure you know what the local tax situation looks like. In the meantime, there is a very useful website, the Crypto Rating Council. It’s a site that shows any crypto that may be under scrutiny or is at risk in any other regulatory way.
Furthermore, regulatory bodies in various countries are looking at all crypto-related aspects such as cryptocurrencies, NFTs and DeFi.
But an entirely different issue is the so-called tainted coins. These are coins that hackers or other bad actors have used for illegal activities in or around the crypto space. And due to the nature of blockchains, each transaction is on the chain. As a result, it is fairly easy to track these coins, and receiving tainted crypto can have all kinds of implications for the receiver. But most or all major exchanges check for tainted coins, if you buy on a major exchange, there’s almost no risk of acquiring them.
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