GERMANY. Blockchain technology has proven itself. If cryptocurrencies were considered something temporary and unreliable more than 10 years ago, today even large companies are investing in them. The volatility of Bitcoin attracts many investors who act mainly on network news and the slightest signs of price fluctuation.
Even though it may seem at first glance that you can make huge profits with it on a regular basis, there are some things you should always keep in mind if you want to succeed in this field. Next, we will also talk about what not to do when the price of Bitcoin drops.
Critical level – When to buy Bitcoin?
The behavior of inexperienced investors is often very similar. When the price of the cryptocurrency that users have invested in drops, many people withdraw their money. While waiting for the price to drop further, some are investing in BTC.
In order to be able to make money in a falling market, it is advisable to have ready-made investment capital. If you have money available before the price of bitcoin falls, you should not wait for its critical level or try to predict the minimum price at which the price could fall. It’s practically impossible.
Always keep in mind that Bitcoin has a fixed supply and controlling the market is not as easy as it seems at first glance. Any speculation is only supported by investors who constantly follow the latest bitcoin news. Even technical analysts cannot accurately predict when the coin will fall. In practice, one can only work with preliminary assumptions based on the historical behavior of the asset. However, no one can guarantee you exact data.
Point: The constant search for a “low point” is dangerous because it misses the benefits of any decline in the price of bitcoin. Since Bitcoin is volatile, it can go up anytime. If you see a downward trend in the price, the best decision is to buy bitcoin whenever it drops. This is better than regretting an imperfect purchase later when the price of BTC starts to rise.
Should I buy another cryptocurrency?
Investing in cryptocurrencies is a complex process that requires a constant supply of knowledge, as well as well-developed personal qualities such as stress and risk management. It often happens that an inexperienced trader buys bitcoin and, as soon as the price of the coin starts to fall, exchanges it for another growing cryptocurrency. After that, the Bitcoin price rises and the trader regrets the wrong decision made earlier.
Therefore, one should never take hasty action. In addition, one should not invest in unstable and little-known coins. If you see that the price of a cryptocurrency has started to rise, do not rush to exchange the coins you already have for it.
There is such a thing as FOMO or “Fear of Missing Out” when the user is afraid of missing out on something important. This fear leads to many wrong and wrong decisions in the trading world, so it should be avoided. It should be remembered that obtaining real profits requires a lot of patience, perseverance and also time.
It is always best to keep up to date with the latest developments in the world of cryptocurrency trading. This allows you to trade valuable cryptocurrencies on trusted platforms like Immediate Edge. You can be sure that all courses are constantly updated there.
Development of your own strategy
Markets do not guarantee financial growth to anyone. Making a profit is always the result of the efforts of the trader, as well as the development of his ability to quickly understand the market situation and identify possible trends over a given period. If you don’t have your own strategy and your own plan, then your trading is just a gamble.
At the same time, constant monitoring of stock charts will get you nowhere. The right strategy, based on your own market analysis, can lead to positive results.
Point: Set a timeline for reviewing BTC charts, then work on developing your primary and backup strategies.
So what if the bitcoin price goes down?
Investing in cryptocurrencies is not just about buying and selling coins or expecting easy profits. It is the process of determining the right time to invest after thorough market research. It doesn’t matter how much and in what direction the market may move immediately after your investment. It is important to always remember that the world of cryptocurrency is unstable and coin prices will inevitably rise and fall.
The general rule of action in all markets, including cryptocurrency, remains unchanged: “buy low, sell high”. However, all is not so clear.
Buying Bitcoin is a serious long-term investment decision. Therefore, you should not just let your moves be determined by minor price fluctuations or your personal emotions and fears.
The action plan for a beginner looks like this:
- market analysis
- Development strategy
- Test the strategy in practice
- efficiency analysis
- Make the necessary changes
Over time, this process will improve. And as you gain experience, you can adapt and develop your personal strategy.