Correction time in cryptocurrencies refers to the period when the price of a currency declines after a significant increase, which is a natural part of market cycles. Correction occurs when the price drops by 10% to 30% or more from the highest level reached by the currency. This event helps to balance the market and remove excess high valuations.
Reasons for correction:
1. Profit taking: After the prices rise, investors sell currencies to make profits.
2. Negative news: Negative reports or legislation may cause the market to fall.
3. Natural Correction: Markets do not move in one direction, so corrections are necessary to build new momentum.
4. Market manipulation: Sometimes the correction is caused by the movements of whales (large investors) who sell or buy in huge quantities.
How to deal with correction:
1. Don't panic: A correction doesn't always mean a market crash.
2. Market Analysis: Use technical and fundamental analysis to understand if it is the right time to buy.
3. Risk Management: Do not invest more than you can afford to lose.
4. Diversification: Don't put all your money in one currency.
If you are a long-term investor, a correction may be an opportunity to buy more currencies at lower prices. If you are a short-term trader, you may need to pay attention to the volatility and act quickly.