If you follow the evolution of the price of cryptocurrencies, you will see everything in red, the color associated with the decline in crypto prices. It’s not an uncommon color on a price chart as the rises and falls are constant, but this one that is taking place seems to go a little further.
Cryptocurrencies are crashing … but before you panic, consider the likelihood of a correction
Are we at the gates of another 2017? But it could be most likely it’s a fix. In the past few months, the price of Bitcoin has seen unprecedented growth, reaching an all-time high of more than $ 58,000. In this case, all the altcoins (in this video we explain what altcoins are) are behind it.
In fact, some altcoins like ADA, AVAX, DOT, BAO, Link, etc. have grown up to 20% without screwing it up, especially in the past few weeks. It is clear that this growth is somewhat abnormal, and when these peaks appear, correction usually follows. That seems to be exactly what is happening as there are widespread losses in all cryptos.
A correction is a price drop of more than 10% that appears somewhat catastrophic on the charts. However, after the correction, the price usually stabilizes on the smoothest sideways move before the high. Therefore corrections and drops (break-ins) They can be a good time to shop and fill bags.
Personally, my strategy is: if there is a very sharp rise in prices and new all-time highs are reached (ATH, as you can see in our glossary), I’ll prepare. If I see a drop of roughly 5%, I’ll wait until the jump (if there is) and sell. From here two things can happen: that I made a mistake or that a correction actually occurs.
If it’s the latter, after the collapse of the crypto in question, I’ll buy again (if the project still seems interesting to me) and get a lot more than before the fall. This can be made much easier by setting up automatic orders that some exchanges allow, as we explained in our last video of the best exchanges to get started in the world of cryptocurrencies.
Remember that we are not financial advisors and that Investing always involves risks. Money is never invested that is not ready to lose!