When is The Right Time to Hodl
For any person involved in crypto investments, the term hodl has popped up at least once. A misspelling of hold, it first popped up in an old bitcointalk post, the poster having declared he’d hodl his bitcoins no matter the market situation. The word became an instant hit.
For any investor, newbie, or veteran, large or small, knowing when hodling is the right decision is very crucial to making money. That calls for more in-depth knowledge of crypto trading, quite different from the normal stocks bourse. So when is the best time for any investor to hold?
Before a Market Boosting Action by The Native Blockchain
Each crypto asset has the supporting blockchain ecosystem that powers it. This ecosystem may usually engage in actions that boost investor confidence and market analyst outlook regarding its native asset. It pays to be aware of any such actions.
The actions may be a major upgrade meant for its blockchain ecosystem. Such upgrades are almost certainly always predated by an announcement of their development and the launch date. A good example is the Ethereum 2.0 upgrade, with its testnet first released on the 18th of April, 2020.
It included a major overhaul of its infrastructure, a boost to scalability and speed, and a consensus protocol migration. The upgrade was instrumental in raising its native coin’s value, ETH, from $215 in April 2020 to the current $1,800 range. Continued hodling following a hint of a major blockchain upgrade does pay in the long run. Other blockchain actions are specific to each ecosystem.
The 2020 Bitcoin halving event, for instance, has catapulted the value of Bitcoin to a new all-time high. The halving event is periodic hence can be anticipated by any investor wishing to capitalize on it. It occurs due to the finite number of bitcoin supply, making mining more capital intensive.
The eventual result is higher market prices for the coin. Keeping tabs on the blockchain ecosystem ensures that any action that may be positive to market prices never passes an investor. There are many groups and online forums full of veteran holders always in the know. Joining one keeps an investor up to date.
Continued hodling in the event of such action is one of the most profitable steps one can take in the long run.
When Dip Investors Pump in Investments
Dip investors are those who invest massively on a crypto asset during a bearish run in anticipation of price recoveries. The actions of these dip investors, more so the larger ones, tend to push prices higher.
Market analysts also add into the fray by giving a strong positive outlook concerning these dip investors’ actions.
Such investors are also usually professionals, at times even analysts themselves. Their investment risks are usually very calculated, many times yielding good gains. For quite a long time, the market may have been bearish, with sustained value losses for the asset.
However, huge interest and increased activities by dip investors is a sure turnaround sign. Hodling is the most profitable action here.
If Whales Continue Hodling or Increase Their Investments
Whales are the investors who move huge sums of funds in the crypto market. They may be institutional investors or Ultra-High Net Worth Individuals (UHNWI). Thanks to their huge investment assets, they hold significant liquidity in the cryptos they invest in.
Investors possess the ability to influence market conditions by their actions or comments. It thus pays a ton by keeping tabs on any whale investors’ actions in a crypto one is invested in. Whether a crypto value has made impressive gains or had a dismal performance, it may be wise to continue hodling if a whale investor stays put.
Whale investors always have professional traders and asset managers to guide their investments, always making calculated moves. An increase in their investments in the coin is an even more guaranteed cause for continued hodling. It is a sign that the asset may make a strong gain in value in the short term, to say the least.
After a Pullback Following a Strong Bullish Market
Crypto trading, like any other stock market, is full of booms and busts. The trick is knowing what these movements mean. An important query is, is it a slight pullback or the start of a long-drawn-out bearish market run?
A careful assessment of renowned market analysts’ opinions goes a long way in giving a credible picture to know better what it is. If most of them are quite confident of a sharp turn to a bull market, continued hodling is the right step. It was just a slight pullback.
Understanding the cause of the drop is also crucial. If it is caused by a security breach that has since been solved by the blockchain’s technical, a resurgence in price gains may soon be expected, making it a slight pullback. Continued hodling is a wise decision.
Besides, evaluating the market situation also helps differentiate a pullback from the start of a drawn-out bearish market. When the value drop starts to plateau, coupled with the fact that there hasn’t been large-scale dumping by other investors, the sign is it is a pullback. The decreasing price drops may point to a potential price gain in the short term, a strong incentive to hodl.
Hodling requires observation and patience, for the rewards may be short, medium, or long term. Some hodling decisions are conducive for rapid, short-term gains followed by gradual longer-term gains such as after a slight pullback. Continued hodling after dip buyers move in also guarantees gains in the short term.
Continued hodling in response to whale investors’ similar actions might have immediate gains if the price was still on the climb. It may, however, have medium-term gains if the asset’s values were dropping.
Taking a hodling in response to positive action in the blockchain ecosystem has impressive long-term gain effects. When one makes the gains depends on the actions causing their hodling.