How to react to the market in the free fall
Many of us have experienced the bullish and bearish times of the market. There is no how the market will remain bullish always and the bearish of the market will only make more people rich while the weak hands lose.
The worst time for the stock is 2008 and the worse I witness in crypto is 2017. What would happen if we have another serious dump and so many FUD that can drop the price of Bitcoin to $15,000?
Crisis in Chinese is 危机(wéijī) which means the same with danger and opportunity. Every downtrend of the market means loss and gain. This can apply to your thinking towards the crypto market.
I will highlight some tips on how you should react to the market in the free fall.
Take control of sales.
Every time the market drops, it means "gain and loses", you may like to take the advantage of the gain part.
Many people will sell off their assets out of the fear of losing more, but the market has always found it was back no matter what since its inception. So this can help you make some decisions. However, buying the dip may be hard because you may not know if the market is already at the bottom. But if you have the intention to hold for a long time, it shouldn’t be an issue and you will be on the gain side at the end.
Other things to consider
The asset: Before you buy the dip of any asset, you ensure you know the all-time low and high of the coin. Then the quality of the asset. You do not want to buy an asset with a "shaky" foundation. The project must have a good structure and the token economy should be clear.
Do not buy all at once. You can set out 5% of the total cash to buy the dip daily or weekly. This will help you minimize the risk of losing when the market falls more.
If you do not have “extra money” do not try this. You should not use the money you keep aside for other important things to take this kind of position in the market because you may have to wait for a long time.
You can lose more than you gain.
The chance of marking profit at a time like this is slim because if you have $1,000 invested in an asset and the market plummet 50%, this means your $1,000 is now $500. For your money to get back to $1,000, the market must do 100% again. This means it is easier to lose than gain and there is no easy money anywhere. Risk is always involved, and the market is always up and down.
If you are opt-out because of loss, it will lock you in your loss. People that sold off their bitcoin in 2017 at $10,000 because of the crypto market plummet, and feel great about it, they now lose the bull run of $60,000 within the space of 4 years.
Stay on course
This is simply holding. A fundamental approach to the market always gives a better direction compared to technical analysis. Technical suggests that what happened some times ago can still happen again, but fundamental gives true long time value on assets.
The market is going down, but check the price of the asset 1 year ago to compare if it is really going beyond or it is still rewarding the long time holders.
When Bitcoin dropped $30,000 this year and there was a noise that Bitcoin was crashing down, I asked: is bitcoin crashing? What was the price last year?
Every time the market declines is a chance to make some gains again out of the market.
Do your research and apply these tips to get the best out of the market.
My name is @tykee (Barlogun Michael), a web developer, Civil engineer, content writer and the founder of Meshboc Technology & Digital Services Limited. I am using my content to share my opinions on tech, lifestyle, and finance, to promote myself and impact my readers. I always like to learn. Education is the most thing I cherish.
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