When the market drop is about to hit, it is very common to think it happens unpredictably, until, BOOM ⬇️
But it is not so spontaneous
To explain it briefly, you should know that there are certain factors that will give you signals, which will allow you to prepare and face it in the best way to minimize damage.
To set the stage, I will talk to you about the possible causes, strategies, and how to maintain resilience (don’t let panic take over you)
MAIN CAUSES
Market drops in crypto are due to factors like these:
- Macroeconomics:
Interest rate hikes and global crises decrease the demand for risk assets.
- Regulations:
Bans or investigations on exchanges generate panic.
- Internal collapses:
Examples like Terra (LUNA) and FTX destabilize the ecosystem's confidence.
- FUD:
Widespread fear intensifies chain selling.
STRATEGIES TO CAPITALIZE
Take advantage of dips with these tactics
- Buy on dips:
Acquire solid projects like Bitcoin or Ethereum at low prices.
- DCA:
Investing regularly reduces the impact of volatility.
- Diversification:
Combine cryptos, stablecoins, and other assets.
- Staking and farming:
Generate passive income while you wait for recovery.
MAINTAIN RESILIENCE
- Emotional control -
Avoid impulsive decisions
- Risk management:
Limit your losses with tools like stop-loss. (trading and futures)
Avoid making impulsive sales of assets you have bought based on an informed strategy, as they can be a good foundation for the new bull market. (hodl)
- Long-term vision:
The market has proven to be generous over time.
Do not gamble, invest.
In summary:
Drops are opportunities for strategic investors.
With calmness, education, and vision, you can turn volatility into an advantage 🍀🔥
