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The Christmas season has not been exactly favorable for Bitcoin and digital currencies, seeing that the first of the cryptocurrencies has fallen by almost 20% in the last 30 days. BTC has been posting a steady decline after peaking in early November, hovering around $43,000 at the time of writing. Generally, the entire crypto market tends to follow in the footsteps of Bitcoin, so the price of all digital assets, from altcoins to NFTs, also felt the impact after this drop.
Longtime hodlers may not have even flinched at the currency’s performance, but newcomers to the crypto sphere may be worried about this devaluation. Do not be alarmed if this is your case. Many people are in your same situation and many of them have been through this before. Many first-time investors in cryptocurrencies in 2020 and 2021. StormGain reached 1 million active users in 2021, thanks to the general trend that saw a considerable increase in subscriptions to cryptocurrency platforms around the world.
This may be the first time many of these new owners have found themselves in a temporary crash, or even a bear market period. The world of cryptocurrencies is not unique in this regard, and it can happen with any type of investment. The most important thing is knowing how to manage the psychological pressure involved in participating in the market so that we can make rational and profitable decisions. Here are some tips to help you weather the storm.
Check the historical data
In any investment, it’s important to keep a long-term perspective. Ask anyone who has been in the crypto space for years and they will tell you that the current price of Bitcoin is far from a tragedy. It was not until January 2021 that BTC broke the $40,000 barrier for the first time, and last summer’s dip was even greater, below $30,000 in July.
In 2020, the price of BTC fell even below $6,000 before hitting all-time highs in the same year. Also in 2018 it suffered a drastic drop until its value was reduced by more than 80%. However, when we look at historical data, we see that this is still a great time for cryptocurrency, and veteran investors who held and even bought BTC during their previous pullbacks know this well because of their long-term view.
Indeed, market volatility is part of its appeal to many traders, as it increases the profits that can be made by buying when the price falls and selling when it rises. The crash of Bitcoin can be beneficial for traders, but you need to be emotionally prepared to take advantage of this situation.
Psychological preparation against the ups and downs
Investing in cryptocurrencies is very easy. They are also a trend in the news and among influencers, who direct our attention to the slightest movement in the market, with all the drama and levels of intensity that being the center of attention in today’s fast-paced news cycle entails. So-called “FOMO” or fear of being left out, greed and real fear can cause short-term investors to buy quickly in times of heady hype, and sell en masse in times of unease and bewilderment.
This can be affected by a large number of factors, from regulatory proposals by governments to viral tweets from influencers, venture capital fads, etc. Of course, it is important to be aware of the latest market news, but it is also important to know that part of this news seeks to play on our emotions.
Newcomers to cryptocurrency trading should assume that this is not the first crash, nor is it the last. If we don’t have the best time to sell BTC and make a profit, why do it right now? Study the events within the long-term evolution of the currency, and your specific needs. If you don’t have a strong urge to sell, it may be better to simply wait for a better time, or even accumulate your assets. Base your decision on the repercussion that the figures have according to your situation. Asset prices and media attention follow cyclical movements, so make sure you use them to your advantage, but don’t let them use you.
Make a plan
One of the best ways to ensure your mental health during market movements is to make a plan. Safeguard the assets you want to use for long-term investments, and separate the assets you can use to play in the market and take risks. A good option, for example, would be to not have the StormGain crypto indices for a longer period of time, as a way to protect yourself against volatility. Options , on the other hand, serve well for speculative purposes. In any case, and as far as all your assets are concerned, decide for yourself beforehand at what price you are willing to buy or sell. That way, when those ups and downs come, they’ll be part of your plan, not just a shock.
Don’t stop learning
Cryptocurrency is an emerging technology not always understood by new investors who entered the market trying to follow a trend. We will do well to wait for further developments that will affect the price of BTC before it stabilizes. However, the adoption of cryptocurrencies by the general public and institutions is growing steadily, and this will not change any time soon.
The best way to position ourselves in this period of adoption involves constant learning and training on crypto assets and the context of their market. But now you don’t even have to put your assets at risk to learn the lesson after a crash. The StormGain demo account allows you to trade virtual cryptocurrencies subject to real market conditions, allowing you to test your ideas and apply them in the next market cycle. And not only that, but StormGain also incorporates a training program integrated into the platform, with resources and webinars available for you to acquire solid knowledge about the crypto sphere with which you can make calm and rational decisions in any situation in the market.
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