Many people are worried about the big drop in the market over the past two days. The question on everyone's mind now is: Is this a good time to buy, or should I wait and hold on to my currencies? Let's break it down simply.
What does a market correction mean?
A market correction is when a market suddenly crashes or drops dramatically after being consistently bullish. This usually happens when prices are above their true value or when there is a collective fear of something.
In crypto, this happens a lot, because the market is known to be very volatile. Sometimes you find Bitcoin going up to the sky, and sometimes it goes down, and all of this happens due to factors such as news, government decisions, or even some speculation.
What happened in the last drop?
Central banks increased interest rates, and people began to fear economic recession.
Rumors of bankruptcy of major crypto companies.
Sudden regulatory decisions from big countries like America and China.
Many whales decided to sell in bulk for fear of losing money.
What should I do? Buy now or wait?
Buy the Dip:
Why buy?
When prices go down, it's an opportunity to buy at cheap prices if you think the market will make up for the losses.
If you believe that crypto has a future, you can take advantage of this time and increase your investment.
What's the risk?
The market may go down further and you don't know when it will stop.
The decline may not be a temporary correction, but a complete collapse.
What would you do if you were going to buy?
Choose strong currencies and stay away from small currencies that do not have a clear project.
Don't buy a large amount at once, buy in stages (Dollar Cost Averaging) to reduce the risk.
Hold on to coins (HODL)
Why do you hold on to your currencies?
If you sell when you are afraid, you may miss out on the opportunity to recoup losses when the market rebounds.
Many people have succeeded in crypto because they were patient and held their coins for long periods of time.
Where is the danger?
If the currencies you have are weak, their value may never return.
The market may remain volatile for a long time.
What would you do if you were caught?
Don't keep looking at the market, because that will make you worry.
Focus on currencies that have a strong project and a good track record in the market.
How to make the right decision?
Look at the general situation: is the whole market going down or just the currencies you have?
Evaluate the currencies you have. Is their project strong and has a future? Or is it just a speculative currency?
Risk management: Don't invest money that you need soon.
Keep your portfolio balanced between large and small currencies.
Use technical analysis. Look at indicators like RSI and MACD to know if it is the right time to buy.
If you are new to the market, take your time and learn before making big decisions.
Don't be afraid to sell in a panic, because this often leads to greater losses.
Think long term instead of trying to win quickly.
