Don't miss out on the huge discounts in the summer cryptocurrency sales!
Introduction
It seems we are currently in a large downtrend in the cryptocurrency markets and people who are new to this are becoming very anxious.
I have written about this issue before but it seems that people still make the mistake of panicking and selling whenever there is a dip in the markets.
There is a tendency to look at whatever is going down and start selling it to buy more of what is going up.
If nothing is going up people start trying to cash out into fiat.
This is what I call the "panic sell trap".
Before we move on I should make it clear this post is based on my own personal opinions and does not constitute professional investment advice.
There are no guarantees in any markets and you should only ever invest what you are 100% comfortable with losing.
Why It's A Trap
It's a trap because (assuming you invested in a sound project) you will regret it later.
Why?
There are no guarantees but the general trend for (legitimate) cryptocurrency projects is upwards.
If you invested in a genuine project then when the next uptrend comes it will start going up too.
To make a profit you want to buy at the lowest price you can and sell at the highest price.
If you buy on a high and sell on a low you will be reducing the potential holdings you have and hence actively shrinking your money.
This is the "buying high and selling low" mistake that many people make.
It is an emotional, fear based response which goes against your best interests.
On the other hand if you buy now, you will reap the rewards when the next uptrend comes.
As Warren Buffet said:
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.”
So Why Is Everything Going Down Right Now?
I think there are three reasons for this:
It is getting close to the August 1st deadline for the UASF on Bitcoin - this is causing uncertainty and fear which results in people being less confident in Bitcoin and reducing demand, thereby causing the price to fall.
When the bitcoin price falls, that reduces the amount of money coming into altcoins and also increases uncertainty in those markets so they fall too.
The altcoin markets were already overvalued due to over-exuberance created by the rapid increases in bitcoin price. This seems to be a correction phase.
Conclusion - When Will It End?
Nobody can say for certain, however the main factor here is the uncertainty over bitcoin and I suspect that instability and fear will persist until at least early August.
Once we get more certainty back with the bitcoin situation I suspect we will see a resumption of the upward march for Bitcoin and a definite break past the $3K mark.
In the meantime if you tend to be the kind of person that panics and makes emotional sells then it may be best to reduce the amount of time you spend looking at markets and prices.
Go and do something else to keep yourself occupied.
The downtrend won't last forever and you may be better off removing any temptation to act in haste.
Thank you for reading
I think that the market would have crashed anyway even without the segwit to be or not to be controversy. The reason being because it has risen too quickly in the last few months and a fast appreciation in price like that brings in a lot of speculative investors and when there aren't enough of these people left to keep buying the price crashes. I wouldn't be surprised if we enter a longer bear market now regardless of what happens with Bitcoin next month. However I don't expect it to last as long as the bear market that started in 2014 because there is now more confidence in cryptocurrencies and people can see that it has already recovered from a very big crash before
Why is everybody talking about a crash. All coins including steem exploded like hell. I think this is just a correction. It will rise sooner or later.
I think a fall from a peak of around $2.80 to less than a dollar in the space of a few weeks counts as a crash for Steem! I agree that it will rise sooner or later but it's a crash nonetheless. I would be very surprised to see it hit a new high within the next couple of months and in fact in my opinion it will still fall further, which is great because we can buy more for cheaper
Agreed. We great 29X in the altcoin space alone from February until June. We had to give some back for the space to continue to grow. To expect it to keep rising without correction would be just silly.
And I also agree with you that the cycles of boom and bust are becoming quicker now than they were in 2014. More money is coming into the space, more mainstream coverage, it's growing.
Like the way you phrase that up.
Thanks!
Hard to say but you may be right.
best time to buy indeed!
but which one
you got a tip wink wink :)
There are lots. I think Steem is an obvious one.
I think that it will rebound… But if it makes a lower low the pattern is in and we are unfortunately in for a rough ride downwards.
Most people will be too cautious now to buy and that's not going to be good for the price short/mid term
Agree 100%
Great!
Very astute observations and overall great advice especially invoking the words of dauntless fiat investors, but I am also weary that BlockChain is due an attack from the Fiat strongholds banks and they could very well be buying, increasing demand and driving prices to then dump, wait buy low and do it all over again thereby crushing the fiat reserves or the uninitiated in these matters. That is why I am with you, when they dump by buying back into fiat their realm we should keep calm and hold as well as by low again and be here ready to ride wave. They have more resources than we do, we therefore must have more patience.
Excellent point. The thing is they can only do that for so long and if they are we should take advantage of it!
say no more, I'm sitting in.
@thecryptofiend Thanks for the detailed explanation of why the crypto market is crashing. Very logical. I agree with your advice about buying crypto now or holding if we already have bitcoins or altcoins.. Upvoted
I am taking your advice and doing something else without looking at the markets.
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For how long does a correction takes place? I have been tracking ethereum from quite some time, it started coming down from close to 400$ , then fell to mid 300's, then ICO happened and the price fell more, after that counterparty came into picture and people started selling in panic, the price came to 280$. In the last week it has come down to 240$ and now it is at 200$. IS THIS CORRECTION?
There is no answer for that. It takes as long as it takes.
I think so, Now it's time to buy or to xchange from sbd to steem
Yes. Check the SBD to Steem rate before you do - sometimes are better than others.
SBD to steem is the best time to exchange
This comment has received a 0.07 % upvote from @booster thanks to: @hamzaoui.
This comment has received a 0.07 % upvote from @booster thanks to: @hamzaoui.
I just follow 7 currencies that I think will last for a longer period, and, as a general principle, I buy the one that has fallen most and when I need Euros I sell some of the one that is up most. Works well enough.
Yes that is pretty much what I do.
I like your rotational strategy.
Panick selling is the worst thing you can do. So many newbies bough in on ETH, for example, in the $300's. and are selling at almost 40% losses just a couple weeks later. It blows my mind. I'm currently buying small chunks at a as it goes down. I'd had to blow my whole load on one buy in price trying to predict the bottom. So I'm averaging it out on the way down.
Yes it makes sense since we don't know how low it will go to buy in stages.
I just visited your blog and saw you are a medic. I'm a career firefighter/emt. While paramedics aren't one the fire department, we work with them hand in hand from the county on any emergency calls in the city. Sorry to get off topic. Just wanted to share a commonality and let ya know I followed ya.
Welcome. I will check out your blog!
Buy buy buy and buy steem and powerup. It is always good to save some cash in order to take advantage of market decline.
Thank you. Your post is informative.
I mine so the price action is not that important to me.
Yeah!! Bought some :)
I think it has more room for correction.I have buy for steem coin at 99 cents.I got some at 1.43 as well as 1.25
I've got some low buys too. I hope they get filled.
Why rush? This market will stay pretty red till the endof the month. The best time to buy is when its the cheapest
Well it is still going up and down but I think it is best to spread out buys because of that.
I have been into Stock trading, and I know that when the markets go doing it is best to buy. Even if you do not buy more, it is always better to hold whatever stock/currency you own now.
Most newbies panic. The worst thing about the market is not the downward trend but the panic button that we keep on pressing and keep selling out all our investments.
The crypto market right now is brutal, and it might get even more brutal, so the best thing to do now is to stay calm and wait for the market to get stable.
Exactly and the panic selling is often what gives these downtrends extra momentum.
Yep, let's hope that this downward trend doesn't last long.
I don't think it will last more than a few weeks but it you can never say for sure.
Yes, it won't last long.
A lot of people seem to be panicking and in fear leading them to sell but it is good for everyone else.
Try to horde as much steem or other altcoins as you can and enjoy your profit when the markets recover.
Steem was around $1 before and it has raised to $1.25
All cryptocurrencies are having their summer sale now! haha
Exactly!
Thankfully I know nothing about the markets so these things don't interest me until I read people on here panicking then I might follow suit
Well it looks like they are recovering again now!
All I need to do first is win the lottery lol
Best time to buy, i agree
I'd have to concur that this down-trend may well persist until the August 1st situation is resolved. How that pans out is really looming over the markets, I think.
Yes I think it is natural with uncertainty.
I completely agree... market prices are influenced by the interaction of the demand and supply forces which, are in turn, influenced by the market participants' perception about the market. The market is completely unpredictable. That is why we have to rely more on our thinking and less on our emotions. Panic leads to chaos which leads to a crash. "Buy low and sell high" is a mantra that holds good for both- speculators and investors. If you are going to invest, hold on for the long run. Patience always pays off.
Yes exactly!
I use that quote all the time:
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.”
The drop in Crypto's will continue if there is a Hard fork.
When SegWit gets going we will see Bitcoin go over $10,000
Hopefully yes - might even happen this year.
I agree your opinion
Thx!
I completely agree that this is a great time to buy - time for me to get more ETH! It's going to be a crazy few weeks leading up to August, that's for sure.
Definitely!
Congratulations @thecryptofiend!
Your post was mentioned in my hit parade in the following category:
Interesting post and must say good advice, Thanks for sharing this
Indeed I just posted as well reminding everyone now is the time to hold/buy. Not sell and don't panick. This fear over segwith will be over soon enough. From there we will be moving forward.
Yes I agree.
In normal circumstances, it is not advisable to buy when the market is falling, if you get in it is like catching a falling dagger. But on a bigger picture, it will definitely rise again. Hence, better to wait for it to stabilise a bit before jumping in. Thanks for your view.
Not exactly - if you think something will rise long term then it makes sense to buy and if you spread your buys out you can make sure that you don't buy everything towards the upper end of a fall.
Obviously you don't want to buy immediately if you think something will fall further.
This all applies to my long term investment strategy - obviously if you are day trading then the considerations may be slightly different.
good post, when i invest i basically take the philosophy of a poker player, when i put my money in the pot its gone, if i get if back from that pot it will have grown and i will have a gain so i never bet more than i can afford to loose! i have a sell price that i never manipulate , have a plan stick to the plan and remember you only experience a true loss or gain when you sell the imaginary profit or loss you are obsessing over is just that , imaginary until you pull the trigger, let i ride folks its volitality and that is where you make or loose the most money.
That sounds like a good strategy.
No, don't buy first. Otherwise, you drive the price up and I cannot fill my order. ;-)
Hahaha.... This is brutal Bro! Hahahaha.... Hope your order is filled.
😂😂
:)
Just what I was looking for after discussing about the dropping prices earlier with some steemians. I agree. Usually, panic selling ends in regret. It's even just in cryto but other things as well. The idea of cutting losses early. I think your advice is sound and instead of panicking, this should be taken as an opportunity for longer term investments.
As long as you think something is going to survive (and even thrive) long term then cutting losses doesn't apply so much.
Be a bull in a bear market!
Happy Tuesday!🌟
Thanks you too!
that's definitely a trap, I'm wondering who's making the majority of this volume ? who initiated the drawdown ?
Most likely people panic selling.
#Secretive Cryptocurrency Hedge Fund Metastable Examined#
“There’s a Handful of, Say Between Five and 10 of These… [Cryptocurrencies]… That Could Be Trillion-Dollar Blockchains” – Joshua Seims, Metastable Co-founder."
Metastable Capital is a cryptocurrency hedge fund that has attracted investment from many top venture capital firms despite largely shunning publicity since its inception in 2014. Metastable was co-founded by Angellist CEO, Naval Ravikant, cryptography expert, Lucas Ryan, and former angel investor, Joshua Seims.
Fortune has reported that Andreessen Horowitz, Sequoia Capital, Union Square Venture, Bessemer Venture Partners, and Founders Fund are among Metastable’s major investors – all of whom participated in Polychain Capital’s fundraiser earlier this year.
Metastable takes a long term perspective when assessing the markets, aiming to invest in projects that it expects will be profitable over the course of at least a decade. “There’s a handful of, say between five and 10 of these major use cases that could be trillion-dollar blockchains,” Seims told Fortune. “It’s all very long-term focused, and we think we’re in super early days right now. It really comes down to which do we think is the strong enough technology, that we think can win.”
Source : - https://news.bitcoin.com/secretive-cryptocurrency-hedge-fund-metastable-examined/
Interesting - I need to check this out. There is also another blockchain based hedge fund coming soon I don't know if you have heard of it:
https://www.monkey.capital/
great analysis
Thank you!
I hope that you're right and August will turn out much more stable.
TTGS - Time. To. Go. Shopping.
As the saying goes, "when there is blood in the streets...."
P.S - awesome scared cat picture :-)
I will definitely be stocking up on this fire sale. Thanks
You're welcome!
It is how capitalism works.... someone gains and someone looses.
In someone's loss there exists an opportunity for someone to gain.
What i don't understand is why in May did all cyrptos increase? What was it that triggered it?
A combination of things which resulted in more people entering the markets and driving up demand.
This is great piece of wisdom you have shared here @thecryptofiend . Market is in general downtrend but it's gonna soon boost upwards. All the blood in crypto's street is just an effect of Segwit implementation. People are just panicking and selling their shares fearing that market will fall further on. But wise ivestors are investing now, because now is the greatest opportunity to invest. As a crpto trader, I also have invested in many potential coins. But the people who are afraid are still selling. I just hope everyone gets profit in the end.
Thanks for sharing this article anyways.
You're welcome.
Very well explained! Like I always say... the crypto market is NOT for the faint-of-heart. For me though, it couldn't have come at a worse time... why not Sept. or Oct. when I'm stable. I need to cash a little SBD out, but I'm determined to at least see it hit $1.25! Good luck to me!!!
It's Sod's Law I suppose:)
Or in my case, probably Murphy's lol!
:)
Hope your shopping was satisfactory
Poor is who stumbles through time with too small sandals
Thanks.
I was expecting to see a shopping list and a fashion show :)
This is really nice and thank you for sharing this inspirational piece with the community. I am new to this whole trading in crytocurrency system and i think this has helped me understand the market a little bit more and i hope all the newbies as myself take it into account also and do not panic sell all their coins.
Glad you like it.
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You made very good point here @thecryptofiend
Totally agree. BTC survived worse than this. I don't think Aug HF will crash it and Altcoins usually just follow BTC.
Holding on my coins and buying more when i see super dip :)
A lot of people are in panic mode. They should know the time to buy is now. Is like all the coins are on sale (discount price). So what are you going to do? Is jump on it.
Exactly.
Interesting post and good advice, I am waiting for August in anticipation. I am just holding on.
Cool.
Be bold when everybody is fearful and fearful when everybody is bold.....!
Yes it's like a rephrasing of what Buffet meant.
precisely.... ;-)
a.k.a. contrarianism
today was the Best day in terms of investment.
I agree. Great time to get in.