Surviving A Dip In Cryptocurrency ; The “dip” in cryptocurrency, otherwise known as the “bear market,” is a term used to describe a severe market downturn in the crypto space. It is the nightmare of nearly every crypto trader, as it keeps them constantly evaluating their trading strategies, to not fall in the negative turnout of unfavorable crypto market behavior.
It’s very hurting when a trader looks at the chart to see their investments going down the drain. At that moment, the question that comes to mind is “How could I have prevented this from happening?”
Despite the occurrence of the dip, there are people, who over time, have mastered some good trading moves, such that keep them afloat, as they employ different strategies to maximize profit-making possibilities. This article is structured to serve as an inroad into surviving the dip in cryptocurrency and to open you to ideal strategies through which losses can be minimized.
How Do You Survive The Dip In Crypto; Strategies To Employ
There are proven principles in the crypto market that keep traders on the landscape of lower loss susceptibility. And while they do not guarantee an absolute shield from suffering loss, they have succeeded in helping traders, majorly, be on the safer side.
1. Leverage Dollar Cost Average (DCA)
Dollar-cost averaging is one of the trading strategies used by crypto experts to reduce the weight of possible loss in the market. DCA is a trading method that borders on the investment of a fixed sum of money, just as would suffice for a potentially good market. However, in this case, investments are made across different intervals in different coins, regardless of the coin price at that time.
The idea of making a fixed crypto investment at regular intervals is so that there’s an accumulation of more profits over time from the long-term dividends of the investment. This way, an investor slashes down the average cost per investment, which lessens volatility impact on the overall investment. Usually, traders leveraging this strategy buy more crypto at lower prices and less at higher prices.
2. Know that an all-time high can be fatal
You do not always have to wait for an all-time high (ATH). Besides, knowing that ATH is not possible with all crypto keeps you one step away from suffering losses. When the market is on a bull run, take a reasonable amount of profit and opt for portfolio diversification. You could get caught up in the middle of a crypto meltdown if you stay too long without taking a profit. Work on your greed.
3. Leveraging the ideal crypto facilities
From buying crypto to selling, and converting them to local currencies, experienced traders know that some decentralized exchanges and certain crypto facilities are better options for different specific causes. For instance, Binance, although has a complex interface and needs guidance for usage, offers one of the best trading features. Thus, securing a space for itself among the list of best crypto exchanges.
Dart Africa on the other hand, as it concerns the conversion of crypto to cash, cutting cost with a fair conversion rate, stands as one of the best platforms over the years, serving specifically Nigerian and Ghanaian crypto traders. This list goes on. So while employing strategies that save the day in the case of a dip, there’s also the need to be able to identify and adopt crypto facilities that can help to minimize losses.
4. Have multiple income streams
This is not exactly a trading strategy, however, having a different stream of income aside from crypto, not only helps you develop confidence while trading, but it also helps you maintain composure and stick to good trading decisions. It is especially a good way to tame fidgeting and rowdiness among crypto newbies.
5. Practice holdings spreading
A very good strategy to minimize loss during the dip is to spread your holdings. Do not confuse this with dollar cost averaging. In this case, it doesn’t matter whether you’re moving up or down the market; it’s about the accumulation of crypto stock at concessions, thereby allowing your holdings to cover a larger landscape. This way, when there’s a dip, calculated losses from a downturn are reduced with a healthy blend of wins and losses.
In crypto trading, to survive the dip and to minimize losses necessitates that you do not just study the market behavior as you can’t possibly have all the time; you have to follow doable logical principles and adopt safe trading mechanisms. We have seen people come out of the deep without being subject to FUD (fear uncertainty and doubt). We’ve also seen people jump on the bandwagon of terrible investments because of FOMO (fear of missing out). This tells that the importance of having trading confidence too, cannot be overemphasized.