Wednesday, 27 December 2017

The Bitcoin Crash: 3 Reasons Why Shouldn’t Worry

Posted by Olga Gorinina at 10:36

It came out of the blue and now you are feeling terrible. We get it, we really do. Part or even a majority of your crypto gains have vanished only a few days before Christmas and New Year.

But like it or not, the thing is… that is precisely how the cryptocurrency market operates. Volatility is high and there are almost no fundamentals behind price movements.

It is risky and just as it should be, highly profitable. Therefore, it is an investment for everyone to consider. And even those who had taken some positions on cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, or Ripple, seem not to be fully ready for the roller coaster.

1 - History tells one thing: do not rush.

Last summer, cryptocurrencies went down by half in value and from Jan 17 we’ve seen a tremendous rebound that left me with pockets fully loaded.

Based on the idea of a potentially greater rebound in the near-term future, maybe it is just time to take a breather, stop looking at the charts and enjoy some delicious Christmas punch.


2 - Low liquidity, a key to understand the crash.

The cryptocurrency market is not really well known for being a liquid one, which turns every large scale selling wave into a potential crash.

Last week, the South Korean exchange Youbit was hacked and thieves were able to take nearly 20 percent of its assets, that might be a reason why many rushed to sell. Plus, security is a major concern among cryptocurrency investors, and news of this kind play hard on sentiment.

3 - The market is a two way road: buy or sell

The question is… on which side do you want to be? When it comes to price crashes, most people are selling their assets, cashing out over fear, uncertainty,... you name it.


But there is another side of the story, buyers who are profiting from desperate investors, taking their assets at competitive pricing in order to later speculate on a rebound. Finding the right exposure for your portfolio (meaning position size) is be a key to your future success.

2 comments :

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