Over the past couple of years, bitcoin has gained significant ground in the crypto world, hitting its all-time high. It was a good time for wise investors. But in the last three years, the story had begun to change. Bitcoin is now getting lower and lower. In 2019, bitcoin was low approximate at about 3400, and in 2020 and 2021, the low was about 5000 dollars and 28,000 dollars, respectively. With the look of things, spectators are predicting that it will fall even more this 2022; it could be 15,000 dollars, who knows. What does this mean for investors? How does it affect them? And what should they do in this kind of situation? We will discuss all this in this blog. So, sit back and read till the end to get the whole idea that will help you make the right decisions.
The way bitcoin rises and falls can look like the earth will collapse, especially when you’re not so conversant with the game. However, when you know the right thing to do, you will enjoy the journey while you make more money from this asset class currency. So here are the things you should do as bitcoin continues to fall.
Manage Your Emotion
Generally, this market condition where bitcoin falls continuously is not a joke. It hurts and is very frustrating. Nevertheless, we should not forget that bitcoin has always been a valuable asset. It has been doing well for a decade, so much that it put a smile on the face of investors.
So, just that it is falling doesn’t mean it won’t go up again. Times like this are there to neutralise and keep the market healthy. And as well, remind us that bitcoin won’t always grow at a high pace. The best you can do for yourself is to master your emotions. It will help you get ahead of most investors and take advantage of the market.
Buy Only at The Right Time
Are you also thinking of buying the dip right now? You probably heard that advice somewhere, and you think it’s a good idea. You may be right. But before you start buying, hold on for a few seconds and hear the remaining part of the equation.
Trading experts have stated that one of the qualities of a good trader is going against the masses. So when everyone is losing interest, the price is low, or the asset is undervalued, that’s your time to get in and take advantage. But there is more: you need a six-letter word element to make a good decision. This is called “timing”. It helps you to know the right time to get in and out of the market in the case that you made the wrong buying decision.
Remember, you are in the crypto market, which can best be described as volatile. Whatever you want to do must be based on logic and not your emotion. To get the right time, you should consider why you want to jump in. Do you want to invest in the long term, or do you want just to make some buck and get out? The answer to these questions will determine your timing and, subsequently, your buying decision. You also need to study and understand the factors around the bear market so that you can predict how sooner or later, the market will pick again. Knowing all these means, you can set your timing right.
Control And Manage Your Risks
This is always important in every investment. Whether you choose to hold your bitcoin, sell it or buy the dip, you are operating a risk. And when it comes to cryptocurrencies, the risk is even on a different level. Evaluating your risk will help you to calm down and make the right choice.
When you overthink or are too scared, you only increase your chance of making mistakes. A wise trader always assumes that his choice is wrong. This will mean that you will put in only the amount you are ready to lose, make rational decisions and invest without panic. And what usually happens? You gain most of the time. If you are not ready to manage your risk, you are playing the game like a gambler and not an investor. Gamblers fail quite often because they don’t evaluate their risks or anything. They just play at the mercy of hope. You are not a gambler. Therefore, you need to always evaluate your risks.
In conclusion, bear and bull moments are part of every market. And when it comes to crypto, it’s even more volatile. As an investor, both the good and bad times are opportunities for you. When bitcoin drops, take your time to train your emotions better and study to understand the market even better. That will help you become a better investor and amass a lot of wealth in the long run.
Did you have learned something useful from this blog? Signup to our newsletter for more, like and share with other investors so they can also benefit. You can check out also these related posts on “Warren Buffett and Charlie Munger Think Bitcoin Will Likely Crash To Zero“. What is your plan should bitcoin go lower this year? We’ll like to know your answers in the comment section below.
Recommended books for further reading:
- Intelligent Investor: The Definitive Book on Value Investing – A Book of Practical Counsel
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits
- The Financial Times Guide to Investing:The Definitive Companion to Investment and the Financial Markets: The Definitive Companion to Investment and the Financial Markets
- Rich Dad’s Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!
- Smarter Investing: Simpler Decisions for Better Results
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