The cryptocurrency market capitalization has recently reached an enormous milestone crossing the $2 trillion mark. Cryptocurrencies have seen rallies lately, pushing the industry’s total market capitalization to double its value a few months ago.

Bitcoin (BTC) remains the leading cryptocurrency by market cap, reaching $1.1 trillion recently. Other than Bitcoin, altcoins — including Ethereum (ETH), Ripple (XRP), BitTorrent (BTT), Tron (TRX), and Stellar (XLM) — have seen double-digit surges in the past week.

This week, Ethereum logged an all-time high record at over $2,150, benefitting off from the ever-growing decentralized finance (DeFi) industry. Other altcoins that belong to smart contract platforms have also seen massive growth in the latest altcoin season.

Tron (TRX) has also seen massive growth in the past week, as its daily transaction counts on its network have been surpassing the transactions on Ethereum consistently. Stablecoin Tether transactions on the Tron blockchain have also eclipsed those on the Ethereum network.

While altcoins were able to benefit from the crypto rally, corrections do occur. It’s common for beginners to enter the market as they see an altcoin rallying, just to find out that the crypto could be at its temporary top.

Even though traders can still hold a cryptocurrency even when its price falls below its entry — this could lead to opportunity cost — where the trader is now missing out on potentially gaining profit from trading other cryptocurrencies that have yet to rally.

This is a common mistake with those who are just entering the crypto market, as there could be a lot of hype with specific altcoins. News around the development of a network or a platform behind the altcoin could also lead to a massive rally, but it could also mean a sharp decline.

Take XRP, for example — the cross-border payments token took a deep dive as its price plunged when the US Securities and Exchange Commission (SEC) filed a lawsuit against the firm that created the crypto.

As many crypto exchanges rushed to delist XRP to alleviate any implications in the lawsuit, the price of XRP tumbled further. However, since Ripple Labs, the company behind XRP, has made more positive progress in the case, XRP has seen a massive surge in the past week, along with the news of its acquisition of a cross-border payments company. XRP’s price also logged gains above $1 for the first time in years.

Trading cryptos in a bull market

While it’s common to assume that it’s easy to make a profit trading cryptocurrencies during a bull market, this is not always the case. There is always a possibility of a retracement in the market, and Bitcoin has seen several pullbacks of over 20% in the previous bull markets.

In a bull market, short-term price volatility is also a concern. As cryptocurrencies enter price discovery, some large crypto investors could dump the digital asset. As with bear markets, bull markets don’t last forever; therefore, you need to have a solid risk management and take profit strategy before entering the market.

Technical analysis tools can help plan out your crypto trading strategy to look at the resistance and support levels for entry and exit opportunities.

The importance of taking profit in a bull market

Crypto bull markets present many opportunities to take profit, as logging a new high could be imminent. However, many traders believe that the cryptocurrency could surge even higher, delaying the choice of which level to take profit from. Before you know it, the cryptocurrency has already seen a pullback.

Missed opportunities to take profit is also something to be aware of, and those who are more strategic in trading crypto will always set levels to take profit. By realizing your gains, it’s only then you would be able to increase your capital and grow your portfolio.

In order to set take-profit levels ahead of time, an automated crypto trading platform like CoinPanel can be of help. With CoinPanel, you can set your entry order — the price and amount you would like to enter the market with, and take-profit orders — your exits and at which price you would like to realize your gains.

By setting your take-profits ahead of time, you can stick to your strategy and not let emotions or greed take over, which could potentially cause missed opportunities.

Setting your stop-losses is essential

Not only are take-profit levels necessary, setting your stop-losses is essential as well. Stop-losses ensure that you will not drain your account if the market suddenly moves in an undesirable direction. These orders also protect you from high volatility in the market.

However, it’s hard to set both stop-losses and take-profit orders simultaneously on crypto exchanges. When you set a stop-loss to manage your risks on exchanges, the platform automatically blocks your balance with the order you set, which then you are unable to set your take-profit orders — meaning you could be missing out on making gains. You also bear the risk of slippage — the price change between the time you enter the trade and its execution — when you trade directly on a crypto exchange.

To combat this, you should use a crypto trading automation platform like CoinPanel — which lets you set your stop-losses and take-profit orders without making you choose one. All you need to do is connect your exchange account to CoinPanel’s secure platform, where you can even set multiple take-profit orders to ensure you realize your gains at different levels.

CoinPanel’s full trade feature is simple to use, letting you set your entry order, take-profits, and stop-losses all at one go, to ensure your orders are set and ready to execute once you have decided on your strategy. CoinPanel solves the problem of having to wait around to check the crypto market to ensure you can complete your crypto trading strategy effectively.

Try out CoinPanel’s full trade feature today, and improve the way you trade!