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cryptocurrency market is currently in one of its biggest drops in history. Bitcoin lost more than half of its value after reaching a peak of around $ 63,000 in May 2021. Its price decline was further exacerbated by China’s FUD Continues creating market uncertainty and scares investors. ripple effect of the Bitcoin price collapse has been felt throughout the cryptocurrency market. major altcoins, including Ethereum, BNB, DOGE, ADA, have lost between 7 and 22% of their value.
When the market continues to crash, it is natural to resort to panic selling in an attempt to save assets. However, selling your coins in a panic is not a good idea and can substantially damage your financial health in the long run. Additionally, panic selling can potentially lock you into losses and ruin your financial growth.
As the cryptocurrency market continues to bleed, you need not worry. Instead, it might be a good time to invest by buying deep and diversifying your portfolio. Here are five reasons why you shouldn’t worry even if the crypto market continues to plummet.
Market declines tend to be followed by rallies
Financial markets, including the cryptocurrency market, have always recovered even after drastic sell-offs. By following this guarantee, you don’t have to worry even when the market is exhausted, especially if you are a long-term investor – there is always light at the end of the tunnel. In its history, Bitcoin has crashed 13 times. worst price collapse was in 2013, when the coin lost 87% of its value in just three days. Even after this crash, Bitcoin rallied, also reaching an all-time high of $ 65,000 in 2021.
One thing that the cryptocurrency market has taught us, particularly Bitcoin, is that it never crashes for the last time. It may take years for the market to recover, but one thing is for sure: the market is always recovering. Better to avoid panic and be patient, as dips always precede market rallies.
Market dips consistently represent a perfect opportunity to make deep purchases. Also, large price drops lead to significant upward trends in the market, which means higher profit margins. As other traders start to panic and sell their assets, you should stay calm and accumulate more cryptocurrencies if possible.
Buying the drop is a time-tested strategy to generate high returns. However, buying a lot does not mean that you should buy assets when the price plummets and the market is quite volatile. Instead, it would be useful for you to buy your favorite currency when the market has fallen and stabilized without significant price movements.
Bad market times lead to good buys. However, you should ensure due diligence and be guided by technical indicators such as short- and long-term MA and historical support levels, among other indicators.
Beware of lucrative opportunities
great thing about the cryptocurrency market is that there are more than 5000 coins to trade, which offers traders great versatility and an opportunity to diversify their investments. Also, every time the market crashes, not all coins lose value. Also, some coins increase in value in the context of a market crash, providing a perfect investment opportunity. So whenever a market crash occurs, take some time to analyze the market and identify the currencies that could go against the market crash and invest in them.
Time to test your HODL strategy
Market crashes are not the time to worry. Instead, they offer a perfect opportunity to try yours. HODL strategy. HODL is crypto jargon that refers to the purchase and retention of coins. An effective holding strategy is helpful in avoiding the effects of short-term volatility and improving long-term returns. In market downturns, implement your HODL strategy by buying your favorite digital asset, holding it for a specified period, and selling it for profit.
While cryptocurrencies are highly volatile, they are prone to market downturns, rallies, and bull trends. For most traders and even investors, market crashes are one of the worst fears, with the potential to wipe out all of their profits. However, cryptocurrency market crashes are a natural phenomenon that shouldn’t worry anyone. After all, the market always recovers after a crash. While it may take days or even years for the market to recover, it will eventually rebound.
After thorough research coupled with a solid trading plan, you can always weather a market crash and even earn higher returns. Market crashes should be the least of your worries in the crypto industry; they will surely happen no matter what.
Wayne is a Blockchain enthusiast and cryptocurrency trading expert. Currently, he deals with trending topics in digital currencies.
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