Bitcoin Dip: What cryptocurrency hoarders and traders should be doing right now

The crypto world is RED! As expected, Bitcoin and cryptocurrency are volatile. It has been weeks of lament and losses for crypto traders and investors due to the market crash experienced all around the world. This is largely due to the current global financial meltdown. Crypto prices soaring and then seem to crash almost as quickly, while rumors, sentiment and fundamental developments are quickly factored into the market.

Volatility is actually one thing that makes crypto unique and why many new investors keep doubting if they should get into the crypto world or not. This recent crash is a put off for many of them. However, for traders and hoarders, it isn’t new. It has been for years now ever since crypto was introduced to the world.

For example, Bitcoin was skyrocketing in November 2021, hitting an all-time high of nearly $69,000. But less than three months later, it lost nearly half its value, plummeting to less than $30,000.

At the same time, ether fell more than 7% to about $2,300. It’s now down more than 35% from the start of the year.

Tether, the world’s biggest stablecoin, also dropped below its $1 peg

The price of one of the top coins, Luna, even became almost equal to zero in the current downturn.

Experts also believe that TerraUSD (UST), one of the largest stablecoins, played a role in Bitcoin’s recent crash. UST is intended to be pegged to the U.S. dollar but it sank as low as 12 cents and collapsed in a pseudo-bank run as investors panicked and sold off their tokens.

There is a saying in the crypto world, you buy when it is dip and hoard. However, it seems this dip doesn’t want to come up and this is where many are worried. With this continuous crash, what should crypto investors be doing right now?

Remain Calm & study developments in the market.

The first thing every crypto trader or investor should do is remain as calm as possible. Fear of losing money and assets would have crept in, but that doesn’t change the reality. Since volatility has always been the name of the game, this should actually be the factor to drive one’s calm.

Moreso, every bear market in the past has seen a recovery in 2-3 years and this shouldn’t be any different. As bad as this crash is, it isn’t the worst in the history of the crypto market crash. At the time of writing this, cryptos like BNB, Cardano, XRP, Solana, Polkadot and Dogecoin have gained up to 9 per cent in the last 1 week. Crypto traders and investors shouldn’t be worried as the market will bounce back.

Take the right action:

After you’re done cooling down and have assessed the situation and what it means for the future, you’ll want to consider how to act.

• Are the risks really opportunities in disguise? Are you investing for the long term? If you see it that way, you may want to continue holding your position or use a dip in the price to buy more.
• Are the risks likely to persist or even grow worse? If so, you may want to take your losses now and stay out of the game for the future. Look at the coins you have and analyze which one won’t likely rise again. You can just trade or sell that and take your loss. It’s better than losing it all.
• Is the situation too murky? If it’s tough to see the way ahead, you may consider splitting the difference, selling some of your position today while still having potential upside tomorrow. More so, you can talk to an experienced trader or investor to know the best steps to take.
• Reconsider what you might be more comfortable with going forward, such as allocating less to crypto in the future or diversifying through crypto-related stocks and blockchain funds rather than directly buying crypto (though you should still expect volatility when cryptocurrency markets fluctuate).

Conclusion

Investors should always expect that cryptocurrencies will continue to be volatile.

Experts recommend keeping your cryptocurrency investments to under 5% of your portfolio. If you’ve done that, then don’t stress about the dip, because they’re going to keep happening.

Investors should have a clear goal for buying crypto instead of being pulled in only because the price dropped. Reasons include seeing the asset as a store of value, viewing it as uncorrelated to stocks or wanting to own it because of the increasing rate of adoption.

Your crypto investments shouldn’t stand in the way of your other financial goals.