Believe me this week is probably one of the worse week for cryptocurrency traders and investors. The market have shade more than $100 billion dollars in the last 72 hours.
The panic is unimaginable especially among those who have just started trading in either bitcoin or altcoins.
No one saw it coming but it has happed. Now the big question is will the market respond or not? Should I invest or not? If you have been asking such questions, you’re not alone. We all are in it together. But don’t there is a light at the end of the tunnel.
One thing we all fell to realize is that it’s a market too and in a market, there is moving up and down depending on the market forces.
The cryptocurrency has come to stay and am writing this to tell you how to avoid the next bloodbath in the cryptocurrency space.
Why am I writing about the next bloodbath when there is one already?
Because the market will pick. And again it’s time to look into the future, but to do that, we have to learn from the lessons of today.
So do you want to avoid the next cryptocurrency bloodbath? Here are three ways to go about it.
- Buy during the deep
This will serve like adding salt to an existing injury. But at the moment, it’s the best time to buy the coins that has the potential that have seen their prices drop.
You can invest little, yet get more coins because the price are low. When the market rebounds, it’s such coins that’ll make you recover your looses and thus give you profit.
For instance, if you’re xyz coin (there is no coin like that, am just trying to illustrate) was $5 some weeks ago and you invested $50 in buying it, you’ll only have 10 coins. Let’s assume the price moves from $5 to $10 and you decide to sell all your 10 coins, you’ll have $100 and that’s $50 profit.
But at the moment that the market is down and XYZ coin is at $1. When you invest the same amount ($50) now, you’ll have 50 coins. Then the market picks up and the coins price moves to $5 and then you decide to sell your 50 coins, your earnings will be $250 and that’s a $200 profit or return on your investment.
In a nutshell, buying at the deep will enable you to get the coins at cheaper rate and in substantial quantity. This will give more profit when there is a marginal rise in the market.
- Have an exit strategy
What goes up most comedown and that’s what we’re experiencing with the cryptocurrency market. having an exit strategy in place will help you avoid the lost of your investment.
No matter how good a coin is, there are times that will be affected by the market and can cause the cryptocurrency to go up or down.
So always set up the price you feel the coin you have invested in must reach in other to sell it and take your investment out.
For instance, when I bought ripple (xrp) at $0.8, I bought it because of the speculation that coinbase will list it as part of their coins that can be traded on their platform. My target was to sell at $2.5 and that was was I did. Even though it went up to $3.8, there was no regret on my side because I have an exit strategy in place.
- Do profit taking
If you’re like me that sometimes have some emotional attachment to certain coins, the above option might not work. In that case, you can do what is call a profit taking.
And this is how it works. You invest in a coin, wait for it to have some gains and then sell part of it in other to recover your initial investment and some profit.
This way, you have nothing to loose when the market goes down or crashes.
Conclusion
The cryptocurrency market maybe down, but it’ll definitely come up. With speculations here and there, such fluantuations are bound to happen. By and large, this is the right time to buy some of the coins that where abit expensive few weeks ago at a cheaper rate and thus boost your profitability.