Panic selling is not limited to cryptocurrency markets, it can be found in all markets as well. Here’s how to stop this phenomenon and regain control of the situation

Bear markets are rife with panic selling, which is the act of exiting a market at a low price based on fear. While the fear of missing out tends to apply more to buying when markets are rising, panic selling is more closely associated with bear markets. The Fear and Greed Index distinguishes between the two using a measure based on market sentiment, allowing anyone to monitor market sentiment before making a trade.

Cryptocurrency selling is not limited to cryptocurrency markets, but can also be found in stock and financial markets. People have an inherent quality that allows fear to overcome reason, which often leads to poor choices, especially in the investment sector.

Fear often fuels FUD news, especially on social media, where fear, doubt, and suspicion spread like wildfire and currency prices can plummet in an instant. Take Elon Musk’s tweets about Bitcoin and Dogecoin and the media hype surrounding it as a prime example.

To avoid this, traders should create an investment plan that they can stick to and refer to when emotions get the better of them. To avoid any pain when it comes to investing in cryptocurrencies, we suggest you pay close attention to the following indicators.

How to Avoid Panic Selling

If you find yourself tempted to take an unprofitable action, consider the following tips on how to avoid panic selling altogether.

Always back to basics

When it comes to making any decisions in cryptocurrency trading, always go back to the main goal: the value that cryptocurrencies provide. While there weren’t many early investors, many have since entered the market to take advantage of the incredible gains that cryptocurrencies have provided over the past few years.

When in doubt, don’t get carried away by price action, but rather go back to the cryptocurrency’s value proposition. If you invest in a cryptocurrency with great fundamentals that you believe in, there should be nothing to worry about in the long run. Similar to buying a property in a good area of ​​town, as long as the neighborhood remains that way, your investment will be strong.

Consider reading a whitepaper about your cryptocurrency project to learn about its use case and use case potential, in order to eliminate riskier assets.

Start investing capital you don't need.

You may have heard the saying, “Never invest more than you are willing to lose,” but think about this: If you invest $100 and count on it every month if the market goes down, you will want to withdraw the money as soon as possible to cut your losses because you need that money.

On the other hand, if you invest money that you don't need this month or in the following months, small price changes will have less emotional weight and you will have a greater chance of realizing long-term benefits and focusing on long-term results.