It’s worth noting how the value of your Bitcoin (BTC) would be worth millions more than how it was when it first appeared on the market back in 2010. Who would have known that if you had bought $1 in Bitcoin in 2010, you would now be left with profit worth millions of dollars? There are not many people who benefited from this million-fold spike in Bitcoin’s price. This is mainly due in part to the fact that the vast majority of the people early in the game opted to sell their entire inventory.
There are not many reasons for an investor to trade in cryptocurrency. One can either earn a reasonable amount or not lose so much in it. The greater the difference between the money attained after the exchange and the price after getting in, the more the profit that trader reels in. But if the opposite occurs, it’s mainly because of panic selling.
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What exactly is panic selling?
Panic selling is somehow brought about by someone who is afraid of losing a lot of dough. A trader that panic-sells, in the long run, won’t quite be able to regain what they have lost in case the price happens to rebound, or they gain the interest to re-enter the market.
The price of cryptocurrency increases when a large number of individuals purchase it (the buying pressure exceeds the selling pressure). The opposite is true when a large number of dealers sell at the same time (the selling pressure exceeds the buying pressure). When the market collapses abruptly, investors, in turn, may be a bit too frightened to make a deal. It’s risky to make decisions due to that feeling alone since the bear market may not be a signal of long-term trends. It’s important to have a long-term view of the investment.
Panic selling is notorious during bear markets, and it may lead a cryptocurrency to decline as rapidly as it climbs when more people buy it.
Here are some ways you can avoid it.
1. Invest what you can afford to lose
Many people panic-sell because they have a deep emotional attachment to their money. They are prone to panic selling at the first indication of a drop. They are putting up an unreasonable amount that they cannot afford to lose.
Traders who have already made millions of dollars, on the other hand, may invest hundreds of thousands of dollars without examining the price since they do not need the money right now. Detachment is a good strategy in the long run to minimize losses. Along with this move is choosing the right platform to trade. The research made for Bitcoin Era, conducted by experts from a well-known crypto media shows its legitimacy and reliability as a trading tool.
Cryptocurrency investments are subject to the same restrictions as conventional stock and bond trading. You should only put money into investments that you can afford to lose. The only reason to spend money you can’t afford to lose is if you are very certain that the currency will deliver in the long run.
It makes no difference what kind of cryptocurrency you invest in. When you have no emotional attachment to the money you’ve invested, it’s better to invest for months or years rather than just a few days or hours. It is more likely that you will sell your cryptocurrency for a higher price than you paid for it when you initially purchased it.
2. Look ahead in the future
Bitcoin has gone from being worth less than a cent to a record-breaking $69,000 in only ten years. The only traders who have held from the beginning are billionaires and millionaires. Regardless matter what the media or others say, a successful trader has a long-term perspective on Bitcoin’s price from the start.
Bitcoin has continuously increased in value over three years from its introduction. Only those who were able to time the market effectively or who held for at least five years, on the other hand, made a significant profit.
In today’s bear market, the price of a Bitcoin may fluctuate by hundreds of dollars in a single day. Similarly, if the price of a Bitcoin reaches a million dollars, it may fluctuate by $50,000 in a single day of trade.
3. Choose better crypto investments
In certain cases, cryptocurrencies may plummet to zero, necessitating panic selling.
The greatest method to assure that a cryptocurrency will recover after a fall is to invest in high-quality projects with substantial market capitalization. Cryptocurrencies sold on well-known exchanges are a good investment.
Because of these disparities, cryptocurrencies with multibillion-dollar market capitalizations and dedicated founders, marketing, and development teams stand out from ones that were founded as a joke. Long-term thinkers favor the latter, which is more likely to crash and burn after a temporary boom in popularity.
4. Just accept that crypto is indeed volatile
The cryptocurrency market is infamous for its violent price fluctuations, with periodic drops of more than 50%. If you want to invest in Bitcoin, the best-performing asset in history, you must be willing to accept losses and drawbacks.
A large market capitalization and trading partnerships with Bitcoin may have a substantial influence on the price of other cryptocurrencies.
Prices may decrease for a little period, but they will almost definitely increase again. Bitcoin’s price has plunged by up to 85% a dozen times since its creation.
Until a trader agrees to accept a loss, they are not technically in the red. When a trader sells their cryptocurrency for a stablecoin like Tether (USDT), they are out of the game. This means they won’t be allowed to participate in recovery, and they’ll only have to reveal their losses for capital gains tax reasons after that.
Bottomline
If you sell in a panic, you might lose a lot of money in the long run. Several dealers who possessed billions of dollars worth of Bitcoin at present prices sold their coins to other merchants who were prepared to purchase them for a few hundred dollars.
As long as your crypto’s foundations are sound, practicing emotional detachment may be good. Instead of spending all of your time on the stock market, you might try meditating, practicing yoga, going to the gym, hanging out with friends, or going on a vacation.
By taking a break from crypto for a while, you might get a fresh perspective on your investments. As a consequence, you may be able to consider other investment opportunities or continue on the track until you’re ready to sell at a profit.
Read also: Will Cryptos be Worthy in Upcoming Years?