For newcomers to the crypto space, both the bull and the bear phases of their first crypto cycle are good opportunities to lose money. The impact can be reduced if they come across some valuable information that teaches them the basics and what to expect, to the extent of predictability.
The interesting fact I observed from my own experience and that of others who shared it, is that after we understand how the crypto cycle goes and we've actually experienced at least one ourselves, we have more issues handling the bull than the bear market correctly.
Why is that? That's a question I've been trying to find an answer to for some time, and I think I have a number of explanations already.
But before I move on, I'd better establish some context, because otherwise, the premise from which I'm starting that we're not handling bull as well as bear may not be correct.
I am mostly a hodler, with trades here and there, but mostly driven by the two phases of the crypto cycle. Plus, I keep some assets no matter how the market moves.
Regular traders, short sellers, leverage traders, and investors in futures or options, have a completely different experience and the way they look at things is from other angles. What triggers them may not be of interest to a hodler and vice versa.
Let's look at the explanations I found:
1. No Pressure: I'll Do Better in the Next Bull Market
Would you imagine that? Hodlers like to hodl! To the point that if they are thinking about taking some profit in the bull market, they keep postponing it due to hype until the bubble bursts. And then they hodl because it's too late to sell, the bear market already arrived. So they wait for the next bull market.
Yep, it happened to me. I'll talk in section 3 about another reason why they keep postponing selling.
2. Hodlers Love to Accumulate
That's a fact! And when is the best time to accumulate? During the bear market. There is an accumulation phase in the bear market for a reason, right?
That doesn't mean holders don't love bull markets. Quite the opposite. They accumulate when the market is depressed thinking of the bull market, even though some of them have more... deep and fundamental reasons for doing so.
3. Nobody Knows Where the Bull Market Tops, But We Have an Idea How Much It Drops
Everyone is making predictions about how high will bitcoin go during every bull market. I haven't heard of any prediction to come true to this date, so ignore all of them!
But that's a problem, right? Where or when to sell if you don't know how high it goes? All while, recent bear markets meant a %80+ drop for bitcoin and a %95+ drop for alts (generally). So, you have some idea where the fall might stop during the bear (plus support levels that can be checked out, which don't exist when the coin makes new ATHs), but are relatively clueless during the bull.
As I see it, there are two ways to approach this problem. Set target levels and start taking profit at those price levels. Usually starting with smaller amounts and increasing the amounts the higher the price.
Also, keep in mind that, based on what happened in the past, bull markets last around 1 and a half years and bear markets around 2 and a half years. Obviously, these are not exact periods, but rather some sort of guidelines. For example, if a bull market has been going for 1 and a half years one should be very reticent that it might last much longer unless the previous pattern breaks.
Final Words
Hodlers get really attached to their hodlings. Often that plays to their detriment. We have to learn to let go, even if just to get more of the same in the future.