The Bitcoin price went diving during the last two days. The largest crypto currency in terms of market capitalisation lost almost 1,000 US dollars in value within a short period of time. The question that arises: buy or run?
The fact that the Bitcoin price falls in the double-digit percentage range within a short period of time is hardly something special for established crypto fans. After all, the crypto currency is feared for its volatility. In the past, it was often the order of the day that share prices changed rapidly. Nevertheless, such a strong dip is a cause for concern for many: Should you sell your BTC before everything is too late and the Bitcoin price continues to fall? Or is it a good opportunity to buy back? Basically, you have to decide on a strategy and stick to it.
Cost average – on the safe side in the long run
A popular method to profit from the Bitcoin rate in the long run is the cost average method. Generously translated: the Bitcoin pension plan or the savings account. The principle is simple and requires no major effort. You invest a certain amount at a regular time (daily, weekly, monthly) and collect Satoshis with it. Strong break-ins or break-outs of the Bitcoin course are thus ironed out in the long term. Advantage and challenge: If you don’t let yourself get upset, at best you make yourself immune to FUD (Fear, Uncertainty and Doubt) or FOMO (Fear of Missing Out). In the end, both are bad advisors and lead to hasty reactions – your wallet suffers in the long run. On request Dr. Julian Hosp confirms this:
In my video right at the beginning of 2019 (Crystal Ball 3000), I repeatedly stressed that this year will be very similar to 2016, but on a 10-fold level. We will have a stronger end than beginning, but on the way there it will go up and down. My forecast was about $8,000 for BTC at the end of the year (from about $3,000 at the beginning). The wave movements now are completely normal. So anyone who has already invested heavily in BTC is best off simply holding on. If you still want to buy, you should use weakness to buy back. Do not sell when the price has just fallen sharply and do not buy when the price has risen sharply. You fall for your emotions every time. Never forget the big picture: We are almost 200 percent up this year!
Daily Trading – Spotlight on the Bitcoin price with Argus eyes
Another way to profit from the Bitcoin rate is trading. You keep a close eye on the price sides, set yourself certain goals and then (sell) buy at a certain point in time. The above also applies here: do not pay FUD and FOMO as victims. It is important to familiarize yourself with the basics of technical chart analysis and to adhere to even set limits.
Futures: Betting on the Bitcoin price
One way of making a profit even if Bitcoin prices fall is to shorten Bitcoin. This works, for example, with the infamous futures contracts that Bakkt has recently launched. This involves concluding contracts and agreeing to buy or sell at a certain time and at a certain Bitcoin rate. In the end you bet on the price of crypto currencies – a risky variant.
The motto in countercyclical investment is:
Buy when the cannons thunder, sell when the violins play.
This means that if the Bitcoin price drops rapidly, it’s time to buy the “dip”. If the price of the crypto currency is so rapid that you can hardly ignore the smell of bulls in the market, it’s time to turn up your nose and realize your profits. The latter is recommended anyway to do regularly – in spite of all “Hodl!
Same goes for the rest of the market – bitcoin is just the most prominent representative of these digital assets. Although, I would advise caution when it comes to XRP and ETH as they are still order of magnitude lower than Bitcoin when it comes to antifragility and reputational stability.
Disclaimer: These statements merely represent the opinion of the analyst and are not investment recommendations. Everyone has to keep an eye on the Bitcoin price – Do your own research.