Popular crypto analyst Michaël van de Poppe is sharing his strategies for tackling the altcoin market.
In a new video, Van de Poppe outlines three game plans for investing in altcoins to help investors take advantage of this bull cycle.
If one is looking to invest in altcoins for the long term, Van de Poppe suggests dollar cost averaging (DCA), slowly allocating small amounts into one’s favorite assets.
“If you DCA into the markets then your horizon is multiple years from here… In that approach if something is running heavily you still want to start DCA’ing or buying a tiny portion every day… accumulating a position that you want to sustain for the coming years.”
Another approach that one could adopt, says Van de Poppe, is swing trading. Swing trading involves looking at the charts on a shorter time frame and selecting entry points that allow for a relatively high risk-to-reward ratio. With this strategy, one is most likely focusing on the daily time frame.
“A different approach is you want to look for swing trade opportunities and want to look for entry points. Swing trade opportunities are often defined from the daily chart… When you are going to use historical price action and be patient, your risk reward starts to change.”
Van de Poppe says traders could look at even shorter time frames for entry points, but warns that as the period in which one is trading becomes shorter, the risk-to-reward ratio shrinks and as such, one should bet less.
“If something is running heavily and you are zooming in more on the daily time frames this means that you are day trading more and taking more risk as the lower the timeframe the less significant [the upside] is…
The approach is different than when you are swing trading as now you are looking at a smaller horizon. The stop loss and take profits areas also will be closer together.”
During his strategizing session, Van de Poppe also takes a specific look at Bitcoin, providing his take on what is in store for the flagship crypto asset.
“Bitcoin USD we are approaching the highs… This $56,000 area still has to break in order to keep the momentum going. Right now we are looking for another test of that region, it looks to me, but I [will] not [be] surprised if we get back towards $52,000 and that is the critical level that we have to hold on the downside to avoid this being a fake-out.
As long as we chop here everything is fine and the more tests that $56,000 gets the weaker it becomes and the more likely it gets that we are going to break through it.”
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