Are your crypto prices dropping, and you are undecided on what to do to remain afloat?

Well, take a seat and read on; I have something for you!

Deciding to buy or sell a crypto is often the most challenging episode in an investor’s life. Ideally, you only buy when convinced that the crypto market price is on its way up and sell when the prospects diminish. Interestingly, you buy from or sell to an investor who is equally convinced otherwise. Both of you cannot be right at the same time; therefore, the decision you make at the right time will be crucial to your success in the volatile crypto market.

Trading or investing in the traditional market is a tough call; however, investing in cryptocurrency requires awareness and knowledge, which this article attempts to illuminate.

You need to possess a solid mental discipline to overcome the challenges attributed to market volatility. The crypto market is often volatile, and your emotional capability and sound strategy will be the cornerstones of your success. There is a need to reconsider what works well for you and do not rush to make decisions and change strategy because of price fluctuations. You can reap substantial returns on investment by venturing into the crypto market. However, you need a viable strategy and patience, especially when the prices of your crypto assets are plummeting.

Re-organize Your Portfolio

The trading market has a life cycle characterized by price swings and volatility, an issue that you must tackle head-on. Volatility is an old phenomenon in the trading and investment market, and it is here to stay. Therefore, avoid overlay worries about the price swings and embrace a strategy to remain afloat. Sensibly, you should only invest what you can lose, a strategy that works well with all long-term investments. However, understanding the crypto market is key to investing in the market. Studies show that there is a growing attention towards cryptocurrency investments, especially by the millennials. Young generation have a better understanding of the crypto market, and have considered investing heavily on cryptocurrencies.

The asset allocation strategy recommended by the Securities and Exchange Commission has worked well for investors. Here, you balance your investment portfolio and allocate different percentages of your investments among different cryptocurrency categories, including tokens, coins, and stablecoins. As the name denotes, security tokens have additional layer of security because of the regulatory oversight by the respective market authorities. As a result, they are less prone to misuse and fraud, and therefore safer.

On the other hand, utility tokens such as Fly tokens are equally viable investment opportunity in the crypto market. Token holders have a broad array of benefits, such as additional rebates and discounted trading fees. As an investor, you can use Black Ocean solutions, including but not limited to NFT market, opportunities in liquid mining and margin trading, Token-sale platform, and liquidity pools. Indeed, the Black Ocean Liquidity launchpad grants the FLY stakeholders viable projects with significantly high annual percentage yield (APY).

Fly Token Price Prediction (Digitalcoin, 2021)

However, there has been a significant shift towards stablecoins, which have mushroomed recently, especially in the wake of COVID-19 pandemic. The dollar-pegged crypto tokens have surged 18-fold to more than $100 billion during the period. Stablecoins are verified on blockchains or decentralized public ledgers and can avoid volatility because they have stable value relative to gold or hard currencies.

Crypto price fluctuations may compel you to consider re-evaluating your portfolio. A notable example is considering the sale of your more-performing assets to increase crypto investments in a specific token or coin in the attempt to restore your portfolio allocations. Ideally, cryptocurrency should be in your portfolio, especially if you seek long-term investment.

Buy More Crypto

Various outside factors influence the crypto market prices, some of which are not related to a company’s performance or quality. For instance, the crypto price may drop not because of the company’s poor performance but based on natural occurrences such as bad/negative news. In such cases, you need to analyze the fundamental financial position of the company in terms of management changes, sales, earnings, and relevant news. If such information paints a similar picture to the firm’s status at the investment time, there is no need to change your strategy. You may consider buying more crypto assets at this time when the prices have plunged.

Nevertheless, if every other company in the industry is performing well and the economy is in good shape, re-evaluate the company for possible changes that might have adversely affected its crypto performance. If the answer is affirmative and there is no sign of a rebound anytime soon, perhaps it is time to decide when to bail out, even without returns on investment.

Watching prices plummet so that you can invest at rock bottom is an unwise investment strategy and often likened to “catching the falling knife.”

Such an approach implies that you are waiting to invest or buy crypto when the prices are at their lowest, at the bottom. While the strategy may sound promising, it is always extremely challenging to predict when/if the prices will hit bottom. You should set a “stop-loss” order at a specific price below the prevailing market price to either limit your losses or protect your profits. Such a predetermined price is the price at which you would offload your crypto.

Re-evaluate Your Investment Plan and Strategy

The market price volatility is inevitable, and every market cycle experiences a fall and rise in crypto prices. It would help if you focused on how the price fluctuations affect your investment plan and what you need to do to remain profitable. An investment plan guides you on keeping tabs on what you want to achieve before deciding to venture into the crypto market. If your expectations continue to be met, there is no need to make unnecessary changes to your crypto investments, irrespective of the price fluctuations.

Many investors make a common mistake in selling their crypto to buy others whose prices are rising. Indeed, it is common to see people sell their crypto assets with plummeting market prices to secure ‘promising’ crypto. However, they soon realize that the prices of their shares start to rise once they have offloaded their crypto. The fear of missing out has made many investors rush into bad investment decisions, thereby making losses.

Consider a long-term investment in viable crypto projects to realize optimum returns on investment in the crypto market. Experts recommend investing substantial capital in the crypto assets and looking away. According to William Kets, associate professor, Department of Economics, University of Oxford, don’t fall into the trap of constantly checking the value of your cryptocurrency. He says that this idea is unproductive and should be avoided. As a crypto investor, you need to consider a long-term investment by buying the assets, continue staking, and exercise patience as you amass interest and potential returns on investment.

Summary

Decision-making is an essential skill in everyday life, and investment in cryptocurrency is not an exception. Crypto price fluctuations are common phenomena in the market cycle; thus, you should not overlay worry about the consequences. Embrace sound strategies to remain profitable or limit further losses when crypto prices tumble. Such initiatives include re-evaluating your investment plan and strategy. Always consider long-term investment in crypto and exercise patience as the investment generates potential returns on investments, including interests on capital. You may also re-organize your investment portfolio to balance the various crypto percentages and restore profitability. Stablecoins, security tokens, and cons are some of the crypto assets you may consider amid volatility and price fluctuations. Investors who understand the crypto market and have stable income can invest more in cryptocurrency. Buying more crypto assets when the prices tumble has also proven to be an intelligent investment move. Lastly, it would be best if you remained emotionally disciplined during price fluctuations due to market volatility. Invest in crypto and remain patient, without anticipating instantaneous growth.

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At VRM Research, we provide regular investment analysis of the cryptocurrency markets in cooperation with our trading department. Check it out and don’t miss the newest trends and developments in the crypto space.