We all know by now that Bitcoin, and most other Crypto currencies, took a fall early on Sunday morning. But how did you handle it?
End of the World?
Was it the end of the world for you? Had you just recently invested in a lot of Crypto, only to quickly see the prices, and your return on investment, fall?
Is all your liquidity now tied up in Hodl'ing your Crypto and waiting until prices rise?
Or had you been thinking about investing recently, and saw this drop as a market correction, and that the time to buy is now?
Did you purchase at the bottom of the dip, and sell again for a quick profit, or are you holding onto your trades and waiting until the prices rise a little bit more? Bitcoin dropped from c. $60k to $50k very quickly, but if you bought at $50k then within a matter of hours it went back to $55k - a nice little 10% profit.
My Own Situation
Okay, and don't laugh, but as a newbie I only have $40 USDT in my account that I am "trading" with on Binance. I'm ignoring my "hodl" account that is about 1.5 times that size. It's not a lot compared to other people, but it is a "fun hobby" at the moment rather than a way to get rich quick.
I took the time old advice of never commiting more than you are prepared to loose. I has split my USDT into four "pots".
Pot 1 : For trading ATOM/USDT - about $15 USDT
Pot 2 : For trading ALGO/USDT - about $15 USDT
Pot 3 : $10 USDT to cover any "fees", spares, impulse trades, and to just sit on.
Pot 4 : Any profit from Pot 1 and Pot 2 (currently about $2 USDT)
Pot 1 and Pot 2 were being traded using Bots via Quandency.
My Crypto bot bought ATOM in POT 1 on Satuday afternoon at 25.625. By Sunday morning it had plummeted to 17.1 at it's lowest - but averaging around 21. Almost a 20% drop.
I used "Pot 3" to purchase more ATOM/USDT mid-morning Sunday at 19.40, and sold this early Sunday overnight for 21.99. So I had made an 11% return on "Pot 3".
Obviously Pot 1 is still a lot lower than the purchase price, but I am happy to "hodl" for a while to see where the market takes us.
My Crypto bot bought ALGO in POT 2 on Sunday Midnight for 1.7089. Yes - just before the price crashed.
I have decided to Hodl this account for a week, see what the market is doing, and then make a decision. Until then, the bot is still running so IF the unexpected happens and it suddenly increases then it will automatically sell.
Currently the price is 1.49, so it has fallen c. 13% from my purchase price.
Why ATOM / ALGO?
I had always thought it there was a price drop and I needed to HODL for a longer period, then I could place this into Coinbase and earn 5% to 6% APR increase on the coins. Better than nothing until the prices rise again at some point in the future!
I had $40 USDT before the price drop. I now have the equivalent of $39.23. This is a 2% drop from my starting position. (excluding "Pot 4"). Given how the markets dropped, "buying" at ATOM the lowest point certainly saved me from a bigger loss. If I had some more liquidity then I would have also done the same with ALGO. My learning point is that you need to keep some liquidity in case the markets drop. How much depends on your risk, and whether you think a true bear market is on the horizon, or whether you think it is just a short term market correction.
Note : All of my articles are my own work and relate to my own personal experience. Investing is always at your own risk.