The further the crypto markets continue to run higher, the greater the risk that another major correction or worse, a market crash will happen.
Over the course of the past month we’ve witnessed coins dropping as close to 30-50% their worth. So, how do you protect your coin portfolio in a down market?
Crashes can happen very fast
- This is not the stock market, an entire market can crash in a matter of minutes.
- It is important to have your stop losses set according to your trading strategy.
- Having cash in a down market allows you to be more aggressive after the crash has recovered.
Trading the news
- Since crypto is such a new and volatile market, the economy tends to react harshly to any sort of negative news.
- This past month, crypto was dealt with two punches: China’s government banning ICOs and JPMorgan’s CEO calling Bitcoin a ‘fraud’.
- These events that can cause a coins price to move wildly up or down.
- At press time, the market is looking to bounce back off of that drop and will almost recover completely.
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Finding the bottom
- You cannot assume that a market bottom is in.
- Stick with a buying strategy, and when the market correction comes you’ll have an opportunity to adjust.
- Learn to average down your initial trades; if the market goes down, add more bearish positions in your portfolio.
Ask yourself if the fundamentals of your coin have changed
- Is your coin still under development. Is the developers staying in communication? Did you do your research and the fundamentals are still sound?
- If you still believe Blockchain technology is revolutionary then you have nothing to worry about.
- Remember, this market will have huge fluctuation and is expected.
Zoom out the chart
- Take a deep breathe and zoom the chart out. We are right back to where we started last last month.
- Zoom out even more and see how far this market has gone.
- Market correction is good sometimes. It keeps the true supporters in.