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How to handle a Crypto Market Crash

By Mchapeyama | CryptoSocial News | 24 May 2021


When you invest in crypto markets, you need to contend with two possibilities- uptrends and downtrends. Usually, when the downtrends are reasonable, investors do not worry. However, when the market suddenly crashes, even those with strong hearts get affected.

However, coming across these market crashes makes you a veteran, an experienced crypto trader. This is because when a market crash occurs, it’s a learning opportunity for everyone, newbies and professionals.

Has the 2017/18 crypto market crash intimidated you? Fact: The 2017/18 crypto market crash affected but recovered and continued with their trading activity. This shall be the case with the current market crash. Soon, you will overcome its effects and get in a stronger market position.

It is important to note that some market crashes are temporal, whereas others are long-lasting. However, in either case, every trader should put strategies to hedge oneself against the impacts of a market crash. Basically, there is no way one person can stop a market crash.

And when a market crash occurs, there is no reason to hammer oneself with regrets. The reality is that there are many more people affected by the market crash. Maybe there are some individuals and institutions that are worse affected than you.

How to react when a crypto market crash occurs?

Probably, your readiness to accept the reality of a market crash is the best line of defence. Usually, when the market crashes and the value of your assets decreases remarkably, you may resort to getting advice from financial advisors. You may want answers to the following questions:

· What should I do?

· Should I pull money out of the crypto market?

· Should I convert my cryptocurrencies to fiat?

There is nothing wrong with asking these questions. It’s normal for any rational investor who wants to preserve the value of his/her investment. However, when a market crash occurs, the best question to ask is: What is that which I should not do? The answer to this question is very important.

Sadly, when a market crash occurs, people panic and make irrational decisions. Some suddenly convert their cryptocurrencies to fiat money. But the greatest advice is: “Don’t panic. Don’t react quickly.” In other words, stay calm. If you cannot stay calm, at least pretend to stay calm. This stops you from making quick decisions that may ruin your future.

Here is a major lesson from the previous crash: Always hedge against price volatility or the effects of market crashes by diversifying your portfolio. This is because when there is a market crash, it does not affect the prices of cryptocurrencies in the same manner. The prices of the various cryptocurrencies fall by different margins. Other ways of diversifying your crypto investment include:

· Yield farming

· Staking

· Liquidity provision

· Mining

One way or the other, these hedge you against market volatility or market dips.

Fact 2: As an investor, know that a market crash cannot last forever. Even if it takes 6 months, it will come to pass, and the price of the token or coin will rebound to the current one and even surpass it.

How can traders capitalize on market crashes?

For many people, a market crash is an adverse thing. Yes, it is adverse, but we can capitalise on it by adopting the best trading or investing strategies.

What strategies can you use during a market dip?

There are several strategies you can choose from. However, in this article we focus only on four strategies.

Buy the dip

This is a strategy which can result in high returns in a short period. With this strategy you buy a cryptocurrency when the price is very low. You can then hold your coins, waiting for a market rebound. As you may expect, the greatest market dip occurs when the market crashes.

HODL strategy

This is one of the best strategies to use when there is a market crash. HODL just means hold on to the cryptocurrencies you have. Do not sell them when there is a crash. Simply understand that no matter what the price is today, it will go up one day. In the future, you will benefit because a market crash only affects the price of the coin not the quantity which is the other variable. So hold on to your dear cryptos and wait for their prices to rebound and even wait for another All-time-High (ATH).

Shorting the crypto

This is another excellent strategy if you have the experience and use suitable tools to track the prices of the cryptocurrency. Shorting means you sell your cryptocurrencies during a downtrend. After selling your cryptocurrency, you wait for the price to further decrease, then you repurchase the coins. You find that you get a greater quantity of the token than before.

Pinpoint strong opportunities

The reason behind this strategy is that prices of various cryptocurrencies do not fall with the same margin during a crash. As a trader, you convert your cryptocurrencies to the ones whose prices fell with smaller margins, with no possibility of further falling.

However, in order for you to choose the best strategy, you should have ample information on price movements. The market price prediction tool is the best thing you should have.

What is the best Price prediction tool on the market?

The price prediction tool is a technology which helps traders to know the possible price changes of specific cryptocurrencies. The tool predicts whether the price of a certain cryptocurrency will go up or down. It also tells you by how much the price is likely to go up or down.

At the moment, NewsCrypto offers the best price prediction tool on the market. That is why most successful traders are part of this revolutionary crypto platform.

The other good thing is that NewsCrypto teaches traders how to use the tool and make successful trades.

For additional information about NewsCrypto read the following articles: NewsCrypto Prediction Tool

Conclusion

A crypto market crash is not the end of the world. In fact, it offers you an opportunity to learn to hedge your investments. Working with platforms such as NewsCrypto that give you advance warnings through the price prediction tool and consolidated and coordinated community predictions will give you an additional edge in the volatile crypto environment.

And you stand a better chance of handling a crypto market crash and even benefit from it.

For more information, visit: NewsCrypto.

 

     

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Mchapeyama
Mchapeyama

I am a blogger and writer


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