As I highlighted in one of my latest updates, following the break below the high-timeframe support range marked in blue, aligning with the early-April bottoming formation, I hedged 50% of my spot holdings to mitigate the short-term downside risk.
The price is now nearing a high-timeframe support range that previously acted as strong resistance throughout 2024 and also aligns with the 0.786 Fibonacci POI, making it a potential bounce zone where the price could find a local bottom.
That said, before I start scaling out of my hedges, I want to see clear signs of strength confirming that a mid-term bottom is in, such as a durable bounce off this high-timeframe support range and a reclaim of the lost support range aligning with the early-April bottoming formation.
Now, going forward, let’s talk about my strategy. As I’ve said for weeks, when price was struggling to reclaim the lost high-timeframe support range at $92K, the best approach was to maintain a diversified portfolio across multiple industries, keep a moderate cash allocation, and, if something like this were to happen, hedge our holdings to mitigate downside risk.
By keeping this conservative approach, we would have been able to take advantage of the upside while maintaining a strong safety net in case of a breakdown like this.
My strategy going forward is simple: for now, I won’t make any changes to my allocations. I will maintain my exposure to defensive sectors and continue hedging, then scale out of those hedges if price bottoms in the $66K–$68K range, aligning with the high-timeframe support range highlighted above.
This approach allows me to offset losses from risk assets through defensive positions that have been going up, while also reducing downside through hedging.
I don’t think the key question is whether we’ve entered a bear market. What really matters is how we protect the profits generated throughout this bull market.
Over the last couple of years, the focus was on maximizing profits, but over the last few months, I’ve shifted toward capital protection.
That’s why I’ve insisted on diversification, avoiding leverage, and maintaining a conservative outlook.
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