Maximizing Downtrends: Accumulation & Dollar Cost Averaging | RekTimes

Maximizing Downtrends: Accumulation & Dollar Cost Averaging | RekTimes


22 June 2021:  The cryptocurrency market is in chaos.  Yesterday, the recent downtrend within cryptocurrencies got ugly once again as holders began selling their holdings into another large correction.  Some of the big coins such as Ethereum held on much better than others.  Dogecoin for example is down over 40% in the past 7 days, with 15% coming in the past 24 hours.  Bitcoin is currently the only major cryptocurrency that has not actually broken its uptrend yet.

This article will explain our strategy for this extended sell off and argue why you should not be panic selling your coins if you hold solid projects.

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Blood in the Water

The original strategy being employed by RekTimes was to look for buying opportunities at low points in the current trends to continually add to our holdings over time.  If you follow us on Twitter, this is evident in our targeting of FORTH token low spots for places to long and accumulate.  In retrospect, this strategy is not changing, just adjusting.  The name of the game has always been accumulation.  If you entered the market late in this current run, this is a fantastic opportunity for you to continue to accumulate coins.

Accumulation & Dollar Cost Averaging

If you ever try to time the market, day trade, or any other risky trading, 9 times out of 10 the cryptocurrency market will burn you.  For most investors, accumulation and dollar cost averaging are the best strategies to employ.  Dollar cost averaging means that over time, you slowly lower the average cost of the coins you hold by accumulating more at lower prices during periods of extended downtrends.  Right now is the perfect time to work on this strategy. 

Through the slow accumulation of coins, your overall average cost for those coins will lower significantly, helping you to reach profit again way earlier than when you first bought in should you be not in profit at current prices.  Just a visual example of this strategy:

You buy $100 in Bitcoin at a price point of $50,000 USD.

100/50,000 = 0.002 BTC

The price goes down to current levels at $32,000.  Your BTC is now worth $64.

You buy $25 more BTC at $32,000.

25/32,000 = 0.00078 BTC

So you now have 0.00278 BTC and only need to get back to $44,964 to break even and get back your $125.

This is dollar cost averaging

Through investing small sums periodically during extended downtrends in the market, you can slowly dollar cost average all of your holdings down so that when the time comes and the market begins to rise again, you don't have to sit and wait until all time highs to actually be in profit again.  This is maximizing the potential downtrend to your own advantage.

What you should NOT do is panic sell.  Dumping at a 70% loss with hopes of buying lower is not an appropriate strategy at this point.  Remember, never try and time the market.  Also, by selling your holdings, that is the quickest way to lose everything.  The accumulation game is for the long term picture.  If you think current prices are terrible, just go back a year and see what Bitcoin or your favorite cryptocurrencies were worth.

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RekTimes Ongoing Strategy

By utilizing the explained strategy above, RekTimes will be targeting a handful of different projects during this period.  We have three different categories: coins we will be actively accumulating, coins we will be holding, and coins that should be sold.

Coins to Accumulate

Rektimes will be actively accumulating the following coins during this extended downtrend:

- Bitcoin (BTC)

- Ethereum (ETH)

- Chainlink (LINK)

- Algorand (ALGO)

- Amplforth (AMPL + FORTH)

Bitcoin and Ethereum are pretty self explanatory.  As the biggest, most solid projects in crypto, these are the obvious projects to continue to stack going forward.  Chainlink is another project we feel is detrimental to the entire cryptocurrency space and at current prices, RekTimes will be a buyer.  Algorand, with the wide variety of positive news, announced partnerships, and ongoing development, makes it another target for accumulation during an extended downtrend.  Additionally, Algorand offers great incentives for holding with an APY of 6 to 7%.  The final project we are actively accumulating is Amplforth (yes, both AMPL and FORTH). The importance of this project to DeFi cannot be understated.  Even with the massive price hit to the FORTH token, with such a low total supply and a direct tie to AMPL, we are stacking FORTH to hold for the next 5 to 10 years.

Coins to Hold

RekTimes has identified a few coins of interest to hold during these extended downtrend periods.  While we will not be actively accumulating these, this by no instance means you shouldn't dollar cost average these coins down should you be invested in them.

- Cardano (ADA)

- Sushi (SUSHI)

- Solana (SOL)

- Litecoin (LTC)

- Polygon (MATIC)

Really the premise behind these being coins to hold is mainly that we feel these are solid projects or major market cap coins (such as Litecoin) and feel they will make a recovery over time.  All the coins identified in the above section, including Bitcoin, can also fall under this category.

Coins to Sell

This section, while possibly controversial with certain investors in the cryptocurrency space, have been identified as very risky to hold long term.

- Dogecoin (DOGE)

- SHIBA INU (SHIB)

- Any 'shitcoins' or 'memecoins'

Holding any of these assets during an extended downtrend is extremely risky, even Dogecoin.  These coins have no true utility, actively or trustworthy development, and tend to fall under the "get rich quick" schemes, the cryptocurrency scams, or just memes.  Dogecoin is the one we understand many new crypto investors are entered in and actively holding.  While there is no guarantee it will continue selling off, there is also absolutely not guarantee Dogecoin will ever go back to its all time high ever again.  Dogecoin was well under 1 penny for a very long time, and through an extended downtrend period, it could return to those levels.

Summary

It is important to note that these recommendations and strategies are the opinion of RekTimes.  We cannot predict the future, but what we can do is employ the best strategies for mitigating risk and improving our positions during periods of high volatility.  Could Dogecoin surge past the 0.70 mark and reach new all time highs in a few months?  Sure.  Could Ethereum collapse into hell and go back to $100.   Sure.  Anything is a possibility, but investors who are stacking the best proven projects will receive the most benefit long term statistically speaking.  Accumulation and dollar cost averaging historically always outperform trying to time the market and panic selling and buying.

We at RekTimes have strong confidence in all the projects we identified that we will be accumulating.  We also have confidence that the longevity of coins like Cumrocket, SHIB, and DOGE will not outperform the likes of Bitcoin, Ethereum, and Chainlink.  Be smart with your money, don't panic sell, and good luck to all of you cryptocurrency lovers out there!

We will continue to cover projects you all identified in our ongoing Bitcoin giveaway contest!  We will also do our best to provide updates on the space, any relevant news, and provide periodic check ins on market volatility.


Check out this link for a chance to win our $100 in Bitcoin giveaway! - REKTimes Bitcoin Giveaway

 

Follow us on Twitter!

 

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zacharias
zacharias

Writer, Thinker, & Philosopher | Founder of RekTimes, Future Humanity


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