How to Prepare for the New Crypto Bull Run, and How Much Can Bitcoin Reach This Time?
The crypto market is highly dynamic, exhibiting ups and downs in a seemingly unpredictable manner. In 2022, the crypto community witnessed one of the harshest market downfalls. It was a long crypto winter that led to massive losses and the bankruptcy of several giants in the crypto industry. But now we see light at the end of the tunnel. There are signs indicating the crypto market is recovering. What’s more, a new bull run might be just around the corner.
Avid crypto investors are excited about a new bull run, which opens the possibility to reap significant gains and, in some cases, make fortunes. However, if caught unprepared, you will not maximize your profits when cryptocurrency prices skyrocket. Also important to consider is that a bull run is usually followed by a sharp decline in crypto prices as hype and excitement wanes. Hence, knowing when to exit the market is critical.
Why Can a New Bull Run Be on Its Way?
Bitcoin (BTC) has a significant influence on the entire crypto market. Notably, the Bitcoin halving is one of the most important events for the crypto market. It refers to the Bitcoin mining reward being cut in half. As a result, the new supply of Bitcoin is reduced. The rest is simple demand and supply dynamics. With a lower supply of new Bitcoin and sustained demand, the price of this cryptocurrency goes up.
Historically, each Bitcoin halving has been followed by a bull run. The first halving took place in November 2012. After this event, Bitcoin went from around $12 to over $1,100 within a year. Nearly four years later, in July 2016, the Bitcoin halving sent this cryptocurrency price from approximately $700 to almost $20,000 in 2017. The most recent halving occurred in May 2020, leading to the bullish market of 2021, when Bitcoin reached its all-time high of $69,000.
The next Bitcoin halving is expected to happen in April/May 2024. Based on previous market patterns, many investors will rush to buy Bitcoin in anticipation of the supply shock resulting from the halving. Such a trading frenzy will increase the demand for Bitcoin, sending this cryptocurrency price to new highs. Recently, Bitcoin reached $37,000, a price level not seen since May 2022. It likely is an indication that investors are already gearing up.
The Bitcoin Halving Is Not the Only Factor at Play
The cryptocurrency ecosystem is quite diverse and complex nowadays. Although the Bitcoin halving is decisive in kick-starting the next bull run, it is not the only factor at play. Speculation, hype, innovations leading to new crypto use cases, and many other factors can determine when a new bull run starts. For instance, the 2013 bull run was fueled mainly by speculation. In contrast, corporate and institutional crypto adoption significantly drove the 2021 bull run. So, analyzing all these historical data can help identify the start of the next bull run, for which the Bitcoin halving timeline provides a guidepost.
How to Prepare for the Next Crypto Bull Run
Below, we provide some general guidelines to prepare for the next bull run. These guidelines are intended to help maximize your gains while minimizing potential losses. If you apply them wisely, you could realize tremendous gains.
1. Diversify Your Investment Portfolio
Bitcoin might be the primary force driving the next crypto bull run, but sometimes, altcoins could be more profitable investments. By diversifying your investment portfolio, you capture the vast upside across well-established and emerging cryptocurrencies. Smart contract platforms like Ethereum, Solana, and Polygon often outpace Bitcoin’s gains. Investing in innovative crypto space sectors like DeFi and NFT ecosystems is also advisable. Find promising projects by looking at adoption in well-established industries like gaming, supply chain, etc.
Add to your portfolio small positions in promising emerging cryptocurrencies, which open the possibility of reaping significant returns. Well-established cryptocurrencies like Bitcoin can increase their price 2X during a bull run, whereas some microcap altcoins can grow 10X, 100X, or more in the same period. However, only allocate small sums in this type of asset since they carry a greater risk of crashing after the bull run is over. It is wise to avoid low-liquidity coins with unproven technology or over-hyped meme coins. Those assets are extremely risky and, more often than not, lead to losses.
2. Secure Your Crypto Investments
There is no sense in capturing gains during a bull run if you lose them because of a lack of security. Make sure your online device for trading crypto is adequately secured. Use strong passwords, 2FA authentication, VPN connection, antivirus, and encryption. Do not share with anyone your private keys or recovery phrases. Refrain from clicking on suspicious links to avoid being a victim of a phishing scheme. Remember, hackers and scammers target novices more actively during a crypto bull run.
Do not leave large sums of crypto funds on exchanges. Instead, use a hardware wallet and trade cryptocurrencies on non-custodial services whenever possible. Lastly, inquire about the taxes you must pay on your crypto gains to avoid any trouble with authorities in your country of residence.
3. Devise an Exit Strategy
A downturn inevitably follows a bull run. So, to avoid losing all your gains, you must take profits on the way up before prices sharply fall. You must pay attention to technical analysis to identify signals indicating the bull run is reaching its peak. These signals include decreasing trading volumes and a sentiment shift from greed to fear.
Since no one can predict the exact date of the bull run peak, you should “trim” your positions. It involves selling batches of your holdings at predetermined milestones during the uptrend. For instance, you can take 20% of your profits at 2X, 10% at 5X, 15% at 10X, and so on. Be disciplined to sell your assets as planned and refrain from “hodling.”
You can keep your gains in stablecoins, which do not suffer from price volatility like other cryptocurrencies. Alternatively, you can hold your profits as fiat money to re-enter the market on dips.
How Much Can Bitcoin Reach in the Next Bull Run?
In light of the upcoming Bitcoin halving in April/May 2024, most investors are intrigued by how high Bitcoin can go during the bull run that will likely follow. Six-figure BTC price predictions are becoming common. Most forecasts for the next peak indicate BTC could reach between $130,000 and $145,000. Notable figures like Tobert Kiyosaki support the projections of BTC surpassing $100,000. Others are much more optimistic. For example, Max Keiser, Chairman of El Salvador-based Bitcoin mining startup Volcano Energy, thinks Bitcoin could reach $220,000 during the next bull run.
Conclusion
The Bitcoin halving of 2024 will likely trigger the next crypto bull run. Investors and traders have the unique opportunity to reap significant profits. Preparing strategies to capitalize on market opportunities to benefit from the next bull run would be best. Research previous bull runs and identify patterns that might repeat themselves. Diversify your investment, implement security best practices, and devise exit strategies. If you execute your plan wisely, you surely will succeed. You can count on LetsExchange.io to diversify your portfolio and move your proceeds into stablecoins.
Disclaimer
Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.