Cryptocurrency market crash... what do I do?
#MarketDownturn The cryptocurrency market is highly volatile, it reacts to external factors that produce sharp drops that lead to unwanted losses, however there are always second chances and formulas to protect your investment and capitalize on these negative fluctuations in your favor. Generally these external factors pass and the market recovers, it has always been like that.
What is causing the market to fall?
In my opinion there are two factors that have negatively affected the cryptocurrency market and the global financial market in general, it's not just cryptocurrencies, this Monday more than 1000 cryptocurrencies plummeted.
- The tension in the Middle East has been one of the main factors, an eventual war of great escalation is about to start, and so it is reviewed in the world, however in my personal opinion that will not happen and this factor will disappear temporarily.
- Economic problems with the major economies such as the US and Japan are present, on the one hand there has been an increase in interest rates in Japan, on the other hand and the strongest factor is the high possibility of the US going into recession, a high unemployment rate is the main reason for this, in addition to the weakness of the stock markets.
The above factors have had a negative effect on the entire global financial market, World markets plummet amid a $3 trillion liquidation , investors like Warren Buffett sells $90 billion in stocks and has more Treasury bonds than the Federal Reserve, in the cryptocurrency market more than $1 billion was liquidated and the market plummets.
Strategies to capitalize on the fall.
Seek temporary refuge in stable currencies for a good part of your investment, in my opinion you should stay away from Memecoin as they will be the hardest hit cryptocurrencies and if the crisis is prolonged these coins are not backed by solid projects and will not be able to face the crisis against other strong ones that are.
There is a strategy that they call buy in fall, this is to buy certain cryptocurrencies when prices fall sharply, for example the investor Justin Sun spent $ 37 million in Ethereum despite the falling prices, something that does not seem far-fetched, Ethereum is already in tune with the ETF funds and to pass the storm is almost certain a rapid rebound in prices,
There is an important announcement coming out of Blooberg and that is that the megatech stocks have cut their losses and clarifies a relaxation of fear.
Tips for staying strong and resilient during market fluctuations.
- As they say to keep warm head, this is to avoid impulsive decisions without prior analysis. Panic selling is not advisable.
- Try to diversify your portfolio, investing in cryptocurrencies that offer less risk of losses, I would say invest in Coins like Bitcoin, ethereun and BNB that always in times of low markets always recover their value, these coins are always a good long term investment.
- I consider very important to keep you always well informed, there are many publications that will give you the latest news and how is the market trend. In my opinion this is vital, there are also many social networks where you know good information first hand.