“This price correction is a necessary ‘purge’ that the market needs to clean itself up.” – Zach Le
Just as in every financial climate, there are times prone to price dips and downward trends. This scenario also plays out in the cryptocurrency market even as it is sure to get buzzing again. Dip in coin prices, halts and corrections are all inevitable; although there’s always profit to be made in whatever scenario; either Bull or Bear market.
What is a Bear market?
A Bear market is a market scenario where coin prices are falling, usually bellow their all-time highs, hence encouraging sell offs and in some cases causing panic among coin holders.
Bear markets are usually characterized by loss of market capitalization and huge sell offs by crypto holders.
The opposite of a Bear market is a Bull market.
Current State of the Cryptocurrency Market
After the massive gains of the past year, with lots of price leaps in coin prices, cryptocurrency faithful have felt the pinch of the current price drop. Starting slowly at the beginning of the year right until its current huge dip at this time.
Most coins have dipped about 70% below their 2017 price gains; a trend which has left a few individuals in panic with most selling their holds, while others lament over fears amidst capitulation.
That said, a more knowledgeable few and enthusiasts are well hinged on the opinion that this dip/corrections were well anticipated due last year’s ‘rapid gains’. To this assertion, here are a few Bitcoin/crypto market corrections cum recovery patterns over the years:
|September 2010 – October 2010||94.1% decrease||$0.71 to $.01|
|June 2011 – November 2011||-93.8%||$32 to $1.99|
|April 2013 – June 2013||-76.4%||$266 to $63|
|November 2013 – January 2015||-84%||$1,166 to $170|
|December 2017 – Today||-80.8%||$19,783 to $3965|
Table above shows the Duration, Percentage Decrease from All-time high and exact Price Decrease of major bitcoin dips or corrections.
Tips To Stay Afloat in a Bear Market
- Always note: Cryptocurrency investing is a long term venture, even as there are short term profits to be made regularly and round the clock; the long term offers more. We are only early and would see more boom.
- Buy crypto with spare money if you cannot withstand price dumps.
- Always have a good understanding of the market before going in.
- Do not sell in losses: In bear markets most coin holders sell off major holds in their portfolio. This approach could be counter productive as you also lose your buy-capital. You are advised to hold especially if there is a huge decrease from your buy price; as for every dip there is a corresponding price rally.
Exceptions:However, if you hold or bought any shit coins, you are advised to sell as a cushion effect against more losses. Also if you’re at break even point (around the point or price you bought in) and fear a further dip, then you could take a decision to sell.
- Control your emotions. Do not FUD. Do not panic sell.
- Take time off the market and focus on some other things. This allows you time to focus, re-strategize and make informed decisions.
- Avoid Pumps and Dumps.
- Bear markets are an opportunity to buy coins at cheap prices, however good technical and fundamental analysis is required to know what prices to set your buy orders.
- Always consider market cap before buying coins. Do not buy Shit coins.
- Diversify your coin holds. At least 5 coins with good market cap, product and team.
- Always take profits when you can, this is the basic aim and it keeps you at an advantage even when prices dip.
- For more expert traders, leverage trading, scalping and shorting could earn you profits.
- Get a good crypto guide, if you can.
- Always DYOR. Do Your Own Research.
- Keep up with crypto news.
NOTE: This publication does not constitute investment or financial advice. Always do your own research.
Copyright regards apply, as opinions are solely of the author.