This is how!
In this series, we will explore important on-chain indicators so that you time generational market tops and bottoms.
In this thread, I will start with the NUPL indicator.
In the coming weeks, I will release more threads on popular on-chain indicators like:
- Long-term holders
This will give you the best chance of becoming incredibly wealthy in the upcoming cycle.
as well as being able to keep those profits.
Many long-term investors need several cycles to become incredibly wealthy.
That's why it's important that you take profits during the next cycle.
We can detect market tops and bottoms by looking at how much profits and losses investors have made.
This indicator is called Net Unrealized Profits and Losses
In the bullrun, the NUPL will be high (above 0.5) because investors are sitting on massive amounts of unrealized profits.
In the bearmarket, the NUPL is negative (below 0) because people have sustained massive losses.
How do we use this to our advantage?
The easiest way is to look at the NUPL data using a fast (30D red) and a slow (90D blue) moving average.
You have two selling strategies you can use:
Step 1: Wait for the NUPL to go above 0.5
Step 2: DCA out of when the red wave starts to flatten.
Sell or hedge 50-75% of your portfolio when the NUPL red wave crosses into the blue wave.
Don't want to sell ?
Hedge your portfolio by shorting with put options.
Put options have no liquidation risk. You just pay the premium.
Here are a few examples of how much you could have saved by using this strategy in previous cycles.
08 January 2019
Sell at $15k
Buy at $3.8k (-76%)
26 March 2021
Sell at $54k
Buy at $18k (-66%)
Here are a few tips, so you make the most of the next rally:
- You don't need to time the top or buy the bottom perfectly
- Don't trade with leverage.
- Make sure you make an exit strategy.
If you follow these steps, you will be better than 90% of retail investors.
What if I only have altcoins?
You can also use this strategy.
The altcoin cycle usually starts after has had its rally.
1. Wait for to rally
2. Wait for alts to rally
3. Wait for a sell signal
Below you can see the Path to alt season.
This strategy will give you much more capital to buy and other cryptos 50-90% cheaper during the bear market.
What is the hardest part of this strategy?
Patience and Emotions
Do not be tricked by your emotions and noise while you wait for a top or bottom pattern to form.