Many of us have experienced bull and bear markets; bear markets have caused many people to suffer heavy losses and mental breakdowns;
Family, let’s talk about how we should deal with the cryptocurrency bear market today.
Extreme price declines over a long period of time are a difficult test for investors, and cryptocurrency prices have fallen by as much as 50% in a few months. But investments do have their depreciation times, and bear markets are what we must face. When everything seems to be losing money, every investor should take the following four actions.
One: Don’t panic sell.
It’s tempting to reduce losses in the face of a sharp price drop, but selling at this time will not benefit when prices rise, and it also violates the rule of buying low and selling high. Although it is difficult to grasp the market timing, selling at a loss will lock in losses. Take a deep breath and think about the reasons why you invested in cryptocurrency in the first place. If the investment thesis still holds, it’s not the time to sell.
Two: Think long-term.
Focusing on long-term goals can keep us in the right perspective when prices fall. Cryptocurrencies are unstable, and we should look at the history of Bitcoin prices. Although it has fallen sharply several times, it has always recovered and set new highs. If the investment period is 5 to 10 years, it is easier to hold during turbulent times.
Three: Use this time to research.
Instead of focusing on the decline, it is better to spend time researching cryptocurrencies or improving investment skills. You can learn about a certain crypto field or passive income opportunities. For example, I learned more during the bear market and also did operations such as staking coins.
Four: Consider buying on dips.
Although "buying on dips" is common, it is not suitable for everyone. Prices may fall further, and you can buy in stages, which is the cost averaging method. But be careful not to buy blindly because the price is low. If you don't have extra cash, your portfolio is already highly exposed to cryptocurrencies, or you don't have time to research, don't buy, there will be lower points.
Finally, the bear market reminds us to manage risks, invest only funds that can afford to lose, ensure that cryptocurrencies only account for a small part of your investment, and have a diversified portfolio so that even if one asset performs poorly, it will not cause financial disaster.
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