 | Hey guys, I know that there are a lot of new players here who are excited about the volatility and at the possibility of making huge returns, however, a basic mistake such investors make is valuing their portfolio against the USD and not against BTC or ETH. This is just a tip, NOT Financial Advice. In a Bull Market - Everything outperforms USD$: - LOW-Interest Rates - INCREASING Money Supply - More lucrative to finance and INVEST- INFLATION eats at the value of USD therefore with time it is expected for EVERYTHING to OUTPERFORM the US dollar. This includes S&P500, NASDAQ, Bitcoin, Gold and etc... Not all Altcoins are created Equally: -Altcoins are a risky business-They are more volatile than Bitcoin and ETH two of the most volatile assets -If we are investing in a more risky asset, we should always ask ourselves, is our RISK ADJUSTED RETURN enough? How much RISK PREMIUM is expected over the market such as Bitcoin and ETH? -If there is a higher risk, and we are not outperforming at least Bitcoin, what is the point? The money is better off and safer invested into Bitcoin. - If you are feeling cocky though you can compare to ETH, however MOST altcoins will BLEED against their ETH value with time. - When selling, taking profits into BTC or ETH will likely help you maintain these gains instead of stablecoins or reinvestment into a different altcoin. (This does NOT means no stables, just means profit-wise) How to compare: -Bitcoin and ETH are the two largest and strongest crypto assets in the industry. They are expected to survive and thrive and as a result, WILL trend up against the US dollar with time.-Most EXCHANGES (Eg. Binance) and CHARTING PLATFORMS have this functionality.-Look for changing trends (Such as from downtrend to uptrend with higher lows), look for the long-term chart (Is it going up or down against BTC on the Weekly?) Here is an Example for LUNA: FIGURE 1: LUNA/USDT - STRONG UPTREND, Approaching ATH (Outperforming USD) FIGURE 2: LUNA/BTC - STRONG UPTREND, NEW ATH SET (Outperforming BTC) FIGURE 3: LUNA/ETH - STRONG UPTREND, APPROACHING ATH (Outperforming ETH) From this Example: Fig1 - Luna is completely outperforming USD Fig2 - Luna is completely outperforming BTC and has set a new all-time high Fig3 - Luna is still outperforming ETH but ETH has outperformed BTC so LUNA/ETH is not at an all-time high yet. The charts may look similar, but you can definitely spot differences, and these are the identifiers to use and examine the difference between LUNA/USDT, LUNA/BTC, LUNA/ETH. Another thing I wish to state is that you don't need to actually do the calculations in math for the BTC Charts. All you need to do is see the price action and understand its general direction. From this, you can see if your coin is outperforming the market thereby making it a lucrative investment, or is it a risk-on asset with no extra benefits than BTC's price? Since I started implementing this I often found my portfolio beating BTCs annual performance by a higher degree and chance. I hope this information is helpful for the newbies, I have bolded the important things to focus on, please inform me If I have missed anything. Thanks. TLDR: Check /btc chart and see if its going up or down then buy/sell from usd chart. [link] [comments] |
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