So, you invested in bitcoin but now the prices is dropping sharply. How do you, as an investor, respond to a bitcoin crash?
The price of bitcoin rises and falls dramatically. However, that doesn’t mean that bitcoin itself is seeing less usage or that investors are bailing on the world’s leading digital currency. So, when the price crashes, how should you respond?
In the words of Douglas Adams: “Don’t Panic!” When things start going south, it’s easy to let your imagination get the best of you. Stay calm and remember that digital currencies are inherently volatile.
Investing in bitcoin requires mental discipline, which means you need to be in control of your emotions at all times. If you start to panic at the first sign that bitcoin is dropping, you’re likely to let your feelings control your decisions, which is never a good thing.
Step back, assess, and think logically about what’s going on. We know that changes in the bitcoin market aren’t always going to make sense. Remember, sometimes it’s not about what you do, but about what you don’t do.
Observe, but Don’t Obsess
Unfortunately, no matter how long you stare at charts, you’re not going to have the ability to change them. It’s okay to spend some time charting and analyzing, but don’t obsess. Don’t waste hours zoning out in front of your computer or phone.
What’s the point in checking on the price every few minutes when there’s nothing you can do about it? Instead, be productive. Find something else to occupy your time.
If need be, set a limit order and forget about it. It’s not easy, but it might be the best thing for you to do.
Remember the Big Picture
Don’t forget about the overarching view. Just because the price of bitcoin drops doesn’t mean that bitcoin is losing its appeal. The world of digital assets has a more diversified investor base than any other market. Remember that.
Have a strategy and stick to it. Don’t become disillusioned if the bitcoin price drops. Selling it off only to see it tick back up a few days later is going to have you kicking yourself. Stick to your guns and trust your strategy.
The cryptocurrency market is volatile. There’s nothing you or I can do about that. It’s the nature of the beast. However, it’s important to remember that when prices start dropping. Especially, when it comes to bitcoin. This digital coin is the biggest piece of the pie in the market and it’s likely that we’re going to see large dips and spikes.
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Remember, stay calm, don’t obsess, and stick to your strategy. While you’re doing so, subscribe to Bitcoin Market Journal so you can view the latest insights into bitcoin trading and investment strategies.