Fibonacci & Market Sentiments for Take Profit Zones

By idiosyncratic | Idiosyncratic Crypto | 25 Nov 2023

The markets have different levels of volatility and the investors shape their investor profiles according to their unique dynamics. For example, while a 10% gain in a week means almost nothing, under normal market conditions, in the crypto ecosystem, that's a lot of money earned in stock markets because of their dynamics.

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As crypto is such a volatile and potentially profitable place, it is labeled as the world's casino. In this ecosystem, you may wake up a day as a person with no single penny or a millionaire who is holding Shiba Doge Inu Baby Elon coins. Remember, this happened a lot of time in the history.

Yet, while there are both risks and high rewards in the market, I've realized something that I always missed in my investments and short-term trades: Sell Prices.

Setting Sell Prices Beforehand

This is not something that I always did especially in my BTC or ETH bags but it worked very well with some so called "gems" with very low market cap but extremely high potential. The strategy sounds like a wise word from Warren Buffet but it will be forgotten by each of us.

There was an effective way that I applied earlier: Fibonacci Extensions

Let's have a look at an example on the weekly chart of RNDR

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As you see, Fibo levels can be a "supportive" tool for you while making investment or profit-taking decisions.

I did not wait for the level of 0.786 and RNDR reached another higher high. Of course these levels are crucial but they are not the spots to make all in buy or all in sell levels. I see them as stairs that you start buying or selling your coins.

Sell & Buy Till Trend Changes

The other thing I realized is that when I closed a trade in profits, I sometimes stopped following the charts, news and the updates on the project. I believe this was one of the biggest problematic decisions of mine because I had already known the dynamics of a coin (Think about XRP and its idiosyncratic nature or Gold, Natural Gas etc.) and leaving your knowledge aside may end up with unrealized loss that you could have made.

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I think the fundamental analysis ( the factors affecting the whole market, rather than just the coin you follow) has the most effect on the markets. Then, I care about what the charts speak to us.

The loss of interest in the market (or exactly the opposite) and the technical levels are crucial to be followed. When it is time to exist, it is time to exist! I lost thousands just because I was being too emotional in my position.

We need to understand the times when we should be in the assets and the times when the fiat money, most probably USD if you are in a developing country, and the positions need to be adjusted accordingly.

For the medium term, I expect crypto to perform very well through the end of the influence of interest rate hikes. Yet, I never go all in and melt my stable portfolio. At that point, HBD is also an amazing alternative with 20% APR! Also, the stablecoins on different Ethereum Layer 2 projects enable me some functionality to transfer the coins cross-chain. Both are essential for your short term trades.

Do you set your sell levels? Share your wisdom below 👇

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