Tips on Cryptocurrency Trading: Gain from Price Crashes
The digital currency market is truly a very changing, volatile game to follow and if you read press writings and analysis or the community in general, whenever there is a price drop/crash you see comments like: its a bubble, sell offs and so on. However somebodies understanding of the decline as losing could be an opportunity for gain.
Very known and much used is the “buying on the best and ‘could-be’ lowest dip”. If we take for example Bitcoin – from a distance view its price development chart is a constant increasing line so buying in when you believe is the lowest could be of great returns.
“Buying a dip in a crash can be difficult, because when do you know it has bottomed out?”
On the other hand COO of leveraged digital currency platform Whaleclub Petar Zivkovski commented his opinion on the idea above:
“Buying the dip only works in a general bull market. If the global trend reverses, buying the dip is useless.”
In the virtual currency market that is general described by a bull or bear trend that forms, it is of great importance to sport strong coins that could be stable for days to come.
CEO of Civic Vinny Lingham stated:
“find quality coins with teams you can trust to execute and weather the storm” and then hold.
So a research should be conducted behind the coin while looking out for its cemented foundation and a compelling business model.
A very respected and well known term “Hodl” on social media and used very much by crypto-enthusiasts is another very basic strategy – Hold the goods you have through losses or sell-offs. Even where there are descending trend or major crashes just do not do anything.
Very preferable by Zivkovski is to hold at least all top-five cryptocurrencies on the list by market capitalization as their place is very well cemented.
Your cryptocurrencies sold to Fiat currency. It should be well timed on the exit from one stage and entrance to the other as founder and CTO of Coinsetter – Marshall Swatt states:
“Exiting to fiat requires that you be able to time the market, both when you exit and again when you return. The smartest strategy is to allocate money you can afford to put at risk, and then stick with your plan regardless of the variations in the market.”
Borrowing Crypto – It is a strategy mainly used by very skilled and experienced traders. Basically, you borrow lets say Bitcoin – sell it – wait for it to drop – and then buy back and return the cryptocurrency token with your return. In the case that the price declines during the process you are making great returns, however if it increase you could lose all. Offered by many exchanges as an option.
Despite all your research and how secure or comfortable you feel about investing, always try to use the money and your investing part which you could afford to lose as the market is very difficult to be predicated with all the system changes and that values are quite based on speculations.