illustrations by Storyset
After yesterday's market downturn, I found myself in a situation I had anticipated. My liquid portfolio plummeted by around 70%, and now I'm in a tight spot where I must hold certain assets much longer than I had hoped. Nonetheless, there is beauty in every setback, and here are some improvements I plan to make.
HOLD YOUR STABLECOIN
For the past two months, my strategy has been to buy every 10%-20% dip with my stablecoins, and it worked. I capitalized on market volatility and made it work. Unfortunately, I decided to speculate with certain coins before the dip, and I'm down by about 50%. The only silver lining is that these coins have long-term prospects and could yield returns while I hold them.
However, I should not have tampered with my stablecoin stash. Now, I need to create a separate stash for buying the dip and another for holding or staking other coins on launchpads and similar platforms. The issue is that I have very limited funds to work with, which is why I need to be more prudent.
DEFINING YOUR PORTFOLIO
This dip has taught me the importance of having stablecoins in both the short and long term. Additionally, it's crucial to allocate a significant portion of your portfolio to stablecoins for security and flexibility. Anything above 40% is decent; you can go even higher if possible. I was following this rule until last week, and I paid the price for letting euphoria cloud my judgment.
Looking back, there were many ways I could have deployed my stablecoins that would have been more profitable in the long run. My fear was leaving my money idle in my wallet for too long. I've always had this idea of moving my capital around and back to a centralized exchange (CEX). Some may disagree with this approach, but understand that this fund is liquid and intended to be used more frequently than usual when I spot an opportunity.
POST-DIP CLARITY
My emotional state is stable. I wasn't panicky yesterday; instead, I was frustrated by the reality that this event signifies another slow climb to the top. This doesn't align with my short-term goals, but there isn't much I can do about it. Also, when I look at the coins I'm holding, I lack confidence in my decisions. Even the worst of them is backed by its blockchain. Thankfully, I did not invest in any speculative Solana meme coins. So, from my current perspective, there are many positives.
In conclusion, my sentiments about this market haven't changed. It's all a psychology game. The market is merely purging greedy hands (those engaged in excessive leverage trading). For the rest of us engaged in spot trading, paying attention to news and hype while holding our long-term investments, we should be fine in the long run. Nothing has changed.
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