Okay so we know that cryptos have taken a hit this last week or more because of news and fear circulating around the Asian markets, I’m on the impression we may be heading into a dip but do think cryptos will do what they have always done and eventually turn around and hit all time highs again especially for some new and inventive coins that are already doing pretty well! So my question is if this is true is it worth me cashing out waiting for a right time to buy back in cheaper or just hold through this dip and eventually come out better than I I was?
Only you can decide what is right for you. But the way I look at it is this.
It is very hard to time the market, any market. So unless you are a day trader the question you have to ask yourself is, what is the upside vs. the down side? In my opinion there is much more room to the upside at these prices than the downside. At these prices I think the price of say, BTC, is more likely to be double in a year for now than to be half the current value. So at approx. 12k the downside is about 6k, but the upside is 12K.
Has the bottom be reached? Maybe not, but when it bounces back it will do so very quickly if history is any indicator. Getting out now in the hopes of getting back in at 10k or even 8K could easily backfire in the hopes of increasing ones profits not all that substantially.
On the other hand if you truly believe that the markets are in peril and that we may be in for an extended bear market, you probably should not be in cryptos as you will not sleep at night. What you might want to do is look for brief run ups in prices and start getting out. By setting exit prices now during a FUD period you will be prepared for the next FOMO period.
The great problem with crypto traders seems to be that they want to buy high and sell low. Also not all coins move at the same time in the same direction. By using limit orders you can stay rational and be able to jump when the opportunity arises. This is true whether you are bullish and want to buy the dips, or bearish and what to sell on the highs.
Also with the tax law changes in the US, you could mess yourself over if by selling and later repurchasing you are changing your investment from a long term capitol gain (over one year) and turning it into a short term trade which might be treated as ordinary income. Not to mention all the extra bookkeeping and fees.
(not advise, just how I see it)
Thank you for your detailed and well thought out comment, I’ve upvoted you and will follow you in hopes that you do the same for me so we may have more talks about crypto in the future :)