With crypto markets currently highly volatile, analyst Johnny (@CryptoGodJohn) believes too many traders are getting caught up in short-term price action at the expense of long-term gains.
In a recent Twitter thread, Johnny argues that in the current environment, investors may see better success looking ahead to 2024-2025 rather than focusing on day-to-day or week-to-week fluctuations.
What you'll learn 👉
Avoid Short-Term Leverage Pitfalls
Right now, Johnny sees many crypto participants getting “chopped up” trying to trade this choppy market on leverage across relatively short time frames. With assets regularly making big swings up and down, leverage can amplify losses during adverse moves.
Additionally, traders risk getting “liquidated” if leveraged positions drop below margin maintenance thresholds on volatility. Numerous seasoned traders have blown up accounts during 2022’s turbulence by over-trading spot and derivatives leverage.
Buy and Hold Spot for Long Term
According to Johnny, sidestepping these short-term leverage risks and simply buying and holding cryptos in spot wallets may yield better profits over a multi-year period. Assets purchased at current lows could see tremendous appreciation into the next halving and bull cycle years ahead.
Rather than watching charts day-to-day, Johnny thinks investors should take a longer view and build positions in quality assets with strong fundamentals and utilities. The short-term gyrations won’t matter as much if holdings are given years to mature.
Patience Required
Having an investment time horizon measured in years rather than days or weeks demands patience, discipline, and emotional control. But Johnny ultimately believes investors positioning themselves for 2024-2025 now stand to be more successful than those trading short-term price action in choppy markets.
As with any investment advice, traders should apply proper risk management no matter what strategies they employ. But Johnny’s emphasis on a long-term perspective offers food for thought.
We recommend eToro
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
