Cryptocurrencies like Bitcoin and Ethereum suffer from unpredictable price changes, and they’re subject to extreme volatility – massive highs followed by equally big crashes. In the past, the cryptocurrency crash has affected a massive number of people. Buy and sell bitcoin using Bitcoin Formula for competitive market rates.
The biggest crash in the digital currency ecosystem occurred when china announced to ban cryptocurrencies as the value of every possible digital currency plunged by almost 30%, resulting in a significant downfall of the cryptocurrency market as a whole. However, there were still many people who survived the cryptocurrency crash gracefully. This article aims to highlight the essential lessons on how to survive your cryptocurrency crash.
Step 1: Know That You Will Lose
No matter how much you have invested in the cryptocurrency, you will still lose your cash if there is an unfortunate cryptocurrency crash; if you choose to invest in cryptocurrency, you must be aware of such risks. Accept that you will lose some amount of your money, and don’t let such thoughts affect your judgment as you will cover it again in the upcoming gains.
Step 2: Wait for the Market to Correct Itself
The market takes a radical correction after a considerable rise; this is the most beautiful time to buy more coins and make more profits by holding them for a more extended period. Sell when coins rise after the dip, which happens naturally.
No matter how much you know about the technology and have studied a lot about cryptocurrency in-depth, it would be the wrong choice if you still fail to start investing in risky areas. If you don’t know who to ask, always ask the question on several forums and blogs related to cryptocurrency.
Step 4: Don’t Panic and Follow the Market
The market moves according to its pattern, and there may be violent corrections where cryptocurrencies will crash in seconds, but this doesn’t mean there won’t be any recovery by the end of it. If you stop investing in cryptocurrencies because of fear, you will certainly miss the opportunity to make more profits. You can still hold the coins until they start to grow again instead of selling them at a loss.
Step 5: Don’t trade or invest based on rumour
When people hear news about a cryptocurrency crash, they tend to sell off their holdings and take unnecessary losses. As soon as rumours hit the market, it is best to wait for an official statement before panicking and taking action. You can join multiple forums related to cryptocurrencies so that most of the questions can be answered by yourself and also have access to the latest information regarding bitcoin and other digital currencies.
Step 6: Keep Up with Cryptocurrency news
Multiple news agencies offer cryptocurrency news daily, and it is the best way to keep yourself updated with everything.
Step 7: Invest in cryptocurrencies that are not in a bubble:
No matter how much people want to call bitcoin a bubble, the fact is that it is not since it has been growing steadily after every dip. You can’t expect the price to be stable all the time, and if you are investing in cryptocurrency, you should be ready for a sudden crash.
Step 8: Don’t Stop Investing
Even when there is a correction, you should continue to invest as soon as there is an increase after the correction. You can even use such opportunities to invest in other coins while they are cheap rather than trying to catch falling knives. This way, you can always make more profit as bitcoin keeps increasing gradually over time.
Step 9: Use decentralized exchange in the instance of the crash:
The best way to invest in cryptocurrencies is by using decentralized exchanges. The advantages of decentralized exchanges are that you won’t lose your money, and no need for third-party verification; these exchanges do not crash.
The above-listed portion has described the nine steps that will help you in surviving your cryptocurrency crash; till date, more than 3000 cryptocurrencies have been launched, and more than 1000 of them are currently active; however, only a few hundred of them are listed on exchanges while others are being developed to launch on exchange platforms. Undoubtedly, the cryptocurrency market is increasing, and blockchain technology has gained a lot of attention from many companies because of its benefits.