58 thousand dollars was the Bitcoin price at the beginning of May 2021, but the value is falling down right now. Today 1 BTC costs a little less than 40 thousand dollars. A lot of people bought the popular cryptocurrency right before the price crash. How should they react to the current situation?
The result of 4 weeks of May 2021 showed a 34% drop in the value of Bitcoin. Today it costs about 39 thousand dollars for 1 BTC. The price tag falls due to the refusal of Elon Musk to sell Tesla cars for BTC and also the pressure of the China government on miners and the legal side of the crypto market in general.
Bitcoin remains in the bull market so far despite the current situation. The path to 100 thousand dollars for 1 BTC continues. Those who got the crypto shortly before the crash at the peak point should know a thing or two.
Some of the past days have shown that the falling and growing changes are very fast. The greatest positive mactor is the entry of big money and corporations into the crypto market. They have a huge investment opportunity, and this will have a qualitative impact on the whole niche in the future.
Long-term investment actions imply plans for several scenarios. Typically, investors have free capital to average and make and ready to buy at times when the market moves down too quickly.
Using a long-term approach up to 1-3 years allows you not to sell the crypto right now. The biggest advice is not to adhere to situational panic, otherwise, the long-term investor becomes a speculate trader. Those who play long should feel no emotions and forget about trying to monitor the market for ideas about spontaneous trades.
Long-term instruments for investor
People who prefer long-time actions should use three tools: a graph of price changes for a month, a logarithmic price scale and an analysis of the entire price history of an asset. This will help to determine global trend without changes related with the transition to disparate price zones.
Bitcoin used to cost a few cents. A little later, it was traded for $100 and more. Today the price tag reaches unbelievable highs. The logarithmic scale helps to equalize periods of this kind. So far, the historical trend works as always, and the correction will stop after the next phase of price growth. It’ll start quite soon, or sooner that almost all people can expect. So, everyone should think over and find personal goals for exit and stop trading in any situation from good to bad and the worst. The global “logarithmic” trend will help to make the best possible decision.
Freezing positions and fixing losses
A long-playing investor should be ready to hold a deposit for 3-4 years. This is totally related to the global bullish cycle. The chance that the repetition of the cycle of the accumulation associated with halving is quite high. In case of bear cycle, BTC may gradually fall to $ 10-15 thousand in the next few years.
The bullish trend appearance is possible only 6-12 months before the next halving (in the middle of 2024).
In some cases, fixing even 1/5 of losses is the better action than freezing funds for some years, especially when there are margin positions. In other case, a useful factor is the actual finance instruments to get the profits.
The task of any long-term investor is to understand the minimal risk of losing everything. If the cryptocurrency realted the spot market, and the asset has not yet been sold and losses have not been fixed, then it is enough to wait for a new impulse for growth. It can be anything: the launch of an ETF, new media personalities (from Musk to Durov), another halving, approval from large states, and much more.