CARUS-AR profit taking strategy in case of Crypto bull market

Published on: 04 December 2023

Finally, after a brutal bear market for all of Crypto, the markets have turned green and all signs are very bullish again. CARUS-AR has moved up over 64% the past 3 months, taking back very large losses sustained during the Crypto bear market. The trend is up, and the important question to ask now is: What is the strategy for CARUS-AR now?

Striving for Improvement

Reflecting on the history of the CARUS-AR strategy since its inception in August 2017, I find it essential to make some noteworthy observations:

  • The diversified strategy has consistently excelled during bullish periods, positioning CARUS-AR among the top-performing strategies on ICONOMI. It has yielded substantial gains during crypto bull markets.
  • However, significant downturns have been challenging during bearish times when ALT coins remain a substantial part of the strategy.
  • While active trading has proven effective in the past, it has also negatively impacted performance when market trends became less clear. Personally, I find it to be too stressful, especially for larger strategies with higher risks.
  • The key challenge lies in sustaining and holding onto substantial gains during bullish crypto times rather than merely achieving them.
  • The ICONOMI platform has evolved significantly in recent years, providing numerous options for rebalancing, profit-taking, and more efficient trading.
  • CARUS-AR has struggled to retain substantial gains during bear markets, often holding onto ALT coins for too long and not making timely exits from markets.

Given these insights, how can we enhance our strategy to navigate another potential crypto bull market successfully?

Implementing an Active Profit-Taking Strategy

The primary focus for the CARUS-AR strategy on ICONOMI will be to secure profits in a structured manner as the markets ascend (assuming they do).

Outlined below are the plans specifically designed for a bullish crypto market, with no guarantees or predictions attached.

CARUS-AR will continue to function as a semi-passive strategy, as declared in our blog post on November 29, 2021: "CARUS-AR: A Semi-Passive Strategy." However, a new active profit-taking strategy will be introduced.

As long as the trend remains positive, we will gradually shift into USD (USDC), Bitcoin (BTC), and PAX Gold (PAXG) in slow, measured steps.

The process involves moving out of high-risk crypto in increments of 1.5% and adding 0.5% to USD, BTC, and Gold at each step.

The aim is to slowly build up 'profit' positions throughout the bull market, with a maximum of 50% transitioning to this position if the bull market extends over a considerable duration.

The Concept

Attempting to day trade or time the peak of a crypto bull market is highly challenging and risky. Hence, adopting a strategy of gradually taking profits during favorable times, extracting a small percentage from crypto holdings in a structured manner, is a prudent approach. (I regret not applying this strategy to CARUS-AR during the previous bull run.)

CARUS-AR will maintain its high-risk profile, focusing on Blockchain scaling, DeFi, AI, Gaming, and other bullish crypto narratives.

After substantial upward movements, 1.5% of the best-performing assets will be divested into USD, Bitcoin, and Gold.

These 'profit' positions will not be reinvested in higher-risk holdings in the short term. Instead, they will be reserved for a true 'bear market,' characterized by negative market sentiment and prolonged downtrends, providing an opportune moment to reinvest secured profits.

Embarking on the Active Profit-Taking Strategy

The active profit-taking strategy has commenced with a rebalance, involving a 0.5% reduction in Frax Share (FXS), Celestia (TIA), and Cosmos (ATOM). This 1.5% has been reallocated, with 0.5% added to Bitcoin (BTC), PAX Gold (PAXG), and USD Coin (USDC).

A heartfelt thank you to all CARUS-AR strategy followers. Let's anticipate the onset of a highly bullish crypto period, prepared to methodically capitalize on profits!

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