Not only Bitcoin, but the entire crypto ecosystem is currently quite turbulent – how should one behave now and in the event of a possible price collapse?
Maybe some readers felt the Bitcoin evolution this summer:
Bitcoin and Altcoin prices rose and rose in June and there was no end in sight. When the “big” price drop came, some were almost relieved, as they offered the opportunity to buy some more. In the wake of the bans imposed in China and Dimon’s negative statements, the Bitcoin evolution was repeated at the end of August.
In the current price slump, many are wondering how to behave. The Bitcoin rate has risen above 10,000 US dollars and had almost reached 10,000 euros. Even in the flash crash, the rate did not fall below 7,000 euros, a value that seemed unattainable just a few weeks ago and is currently moving around 8,000 euros.
This latest, slight price correction made many people nervous – by the way, not much happened in the long run:
That’s just a side note. Motivated by the exchange rate fluctuations, various people asked for instructions on how to act now in order to make as much profit as possible. To be completely honest: We at BTC-ECHO don’t have the recipe how to make unbelievable profits in the current price situation and a consolidation afterwards. Of course we give in the price analyses, in the market observations and in the crypto compass assessments about the price behavior, but we do not take the trading from anyone. In this series of articles, however, I would like to give some basic information on this trading.
Trading and Investing – make up your mind!
One question that should be pursued is: Do I plan a long-term investment or am I a trader?
Not a few tend to both. You can do this in a controlled manner, but you should strictly separate these two approaches, i.e. have one pot for the long-term investment and another for trading. If you don’t, you tend to follow trading half-heartedly and emotionally. This is a good way to lose money. One then jumps emotionally into trades without any real strategy, leaves it there and is disappointed in the end that the price has fallen by 20% – if one had left one’s money in Bitcoin!
In order to clarify the question, which one can casually call “Trader vs. Holder”, for oneself, another question has to be answered first: How much time do I have? For working people, the long-term investor approach is often better; you regularly invest money and enjoy accumulation. Should the seven lean years come to an end, one is pleased that one can currently buy cheaply.
As a trader, it must be clear to you that trading, as long as you hold positions, is a full-time job. Sure, you can control a lot about stop losses and targets, but if you don’t want to do algorithmic trading, you have to do something at least when choosing a good entry moment and updating stop loss and target.