The November 2018 latest notorious crypto free-fall has continued sending all the crypto assets to their lowest levels for well over a year. Total market capitalization is back to August 2017 levels and the market mood is far from excitement.
The Bitcoin lost 12% in 24 hours on November 20th, which sent it below $5,000 for the first time since October 2017. However, the bulls were in control of the markets back in the day, whereas today it is the bears. Meanwhile, Ethereum is dying slow as another SEC charge on two ICOs has put them all in panic mode. ETH has been smashed again lately falling another 13% to below $150, its lowest level since May 2017. Fact is, even before the ICO 17' boom Ethereum performed better so it could be the end of days for high priced ETH.
Instead of waiting for rates to go back, the wise strategy would be adapt to survive and win in such conditions.
One gets pleased watching his digital incomes grow over time, but achieving success by purchasing tokens and calmly waiting for the gradual rate growth to the level when their sale will be profitable is not the key to success. This is just nothing more as a rookie game, favored by most of the new market players.
What’s the future brings to us?
Fact is, most world top analytics think that the times of rapid asset growth and 1000X’s unexpected rapid jumps are over now.
There is indeed a certain cause for concern, as the total market capitalization of more than 2075 currently existing digital assets has surged to nearly $140 million recently. The negative side is, these currencies have been suffering some weakness latest times, as most assets have dropped significantly from their peaks.
The key to survival the hardships in such conditions is learning how to make money on the stagnating market. How to deal with the situation when you are among the small investors and overwhelmed with news of whales’ market play? Waiting for another leap in growth just sitting on ice is the worst advice that can be given in this situation — you can also lose access to your assets on the exchange due to often hacks, which will not stop in the forthcoming future.
The approaches to secure your victory
In case of crypto markets downfall, which is just what happens nowadays, there are several ways that investors can profit.
1)Buy the dips
The first one buying the dip can generate compelling returns. Anyway, that trader should be qualified enough to do it, as pulling this off with efficient is not that easy as may look for the first glaze.
The investor must take a lot of money for market research to use this strategy successfully — which is quite challenging to what many experts say. Do note that after peaking in 2013, the Bitcoin prices gradually lost value for about two years.
Actually, market crashes offer numerous opportunities.
2)Hold On For Dear Life
One of the most known lifehacks in digital currencies market is to Hold On For Dear Life, or simply a strategy that many ones refer to just as HODL.
That approach means buying cryptocurrencies and holding on to them for a substantial period, regardless the possible losses — or how much the digital assets fluctuate in value. It’s the classic one approach used by many rookie traders, and analytics state that most investors will probably use it during the possible market crash.
Well, no doubt that holding in this manner presents a working strategy, investors who decide to stick with it, should hold on the primary assets, and not the altcoins someone promoted as the future top’s — simply choose among the top five cryptocurrencies by market cap.
3) Use decent automated solutions
However, the trader needs a convenient tool to minimize the risks and win on stagnating markets. The arbitrage is suitable for such turmoils and the platforms using it for their advantage can definitely win in such situation.
One of such solutions is the UK-based Arbidex platform, which utilizes the automated trading algorithms to engage users in the crypto investment process and earning profits with reduced risks. Why? The platform doesn’t care for a fall or rise, high or low market cap — the thing that only matters for arbitrage to work is the rate difference.
It also saves one’s time due to the robotic nature of trades and increases the chance to gain profit significantly — as the human fails are excluded from an equation in this case.
4) Exit to fiat market
Some traders suggest to return to fiat currencies when crypto markets may crash. However, some market specialist outline that exiting to fiat currencies requires careful market timing as when you choose to exit and return should you wish so. The best approach is chose the amount of money you can put at risk, and then just proceed with your plan regardless what happens out there in the market.
5) Bitcoin shorting
Traders can also generate very robust returns by shorting the Bitcoin — this opportunity is offered by many exchanges nowadays.
For example, the Bitfinex, Poloniex, and Kraken all offer this functionality.
Anyway, shorting is a strategy aimed for experienced investors since this approach can be quite risky.
Do also note, that before using any strategy to gain profit from a market crash, investors should make sure to perform their due diligence.
No one knows how long another growth holiday will last, so all the transactions with digital currencies should be as fast as possible — when approaching the profit of 20%, you can safely close the position and move to a new direction. Do not freeze the capital for months during which it would be possible to do daily plus of 5–10%.
Some people say, that the industry future looks bright, but the period of uncertainty is more than long — due to latest news, almost $20 billion has been lost in 24 hours, Bitcoin Cash is almost dying, and it’s Big Brother not far behind. Only time will tell what’s ahead — and you have to make sure you will succeed in currently existing environment.