A Noobs Guide To Surviving A Crypto Crash
The explosive growth in Bitcoin can be absolutely breathtaking, but the cryptocrashes can be completely gut wrenching! Cryptocurrency is quite possibly the most volatile market on earth.
Experienced traders often joke that you are not a true Bitcoin investor until you have experienced at least one market crash.
Here are a few tips for crypto noobs that will help you get through the down days or what some consider a crypto crash.
Crypto Crash Tips
The cryptocurrency markets are incredibly volatile, while a 30% drop in your recent investment might make you feel sick, remember that a 30% move to the upside can happen just as quickly. New investors who buy Bitcoin and other alts because of their incredible price growth, unfortunately are the same investors who sell immediately when a “crash” comes, losing a lot of money.
Experienced investors usually end up buying up this cheap crypto and riding it back up to higher prices. It may seem cliche but “buy high and sell low” is a good mantra to follow.
Investors need to realize that even if they have traded in other markets, cryptocurrency is another animal all together. Most importantly remember these markets are volatile, if you can’t handle the volatility, you should not be trading cryptocurrency. That being said, there are a few things new investors can do to help them manage a crypto crash!
- Number one, as previously mentioned, Cryptocurrency is volatile, try and avoid emotional trades. This means no panic buying or selling. At this point in the cryptocurrency markets, wild price swings are normal, 20-30% moves are to be expected. It is also important to remember that some popular crypto services like Coinbase often experience outages during periods of high volume. That means you might not be able to buy or sell when you want to. Keep this in mind when planning your trades.
- Only invest in high quality projects – when choosing investments make sure you research the technology, the team behind the project and the plans for future growth. It is much easier to stomach a 20% move to the downside, if you know the project is solid and you believe in the technology.
- Diversify – Much of the market moves in tandem with the price of Bitcoin, although this is beginning to change. Spread your investments over a variety of tokens/coins. Do not hold all of your investment in one coin. There are a bunch of ways you can diversify. For example you may want to hold some coins that are “currencies” like Bitcoin or Litecoin, while also holding some tokens associated with companies or platforms, like TenX or Ethereum. You may also consider holding a few privacy tokens like Monero or Verge in the event government intervention spooks the market. There are lots of ways to balance your portfolio and over time you will gain a better understanding of how the markets react to certain news and how you can protect yourself.
- Look at the long term chart – when looking at price charts remember to zoom out and take a step back. Look at the price movement over the course of a week, month or year. It’s possible that your investments are still up from the time you bought in.
This does not mean that there are not plain old bad investments. However if you follow these tips and invest wisely, you will come to understand that while cryptocurrency is volatile, you don’t need to panic every time the markets are down.
*The information provided on this website does not constitute investment advice, financial advice, trading advice or any other sort of advice and you should not treat any of the website’s content as such. Crypto Learning Academy does not recommend that any cryptocurrency should be bought, sold or held by you and nothing on this website should be taken as an offer to buy, sell or hold a cryptocurrency. Do conduct your own due diligence and consult your financial advisory before making any investment decision.
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