Tips On How Best to Handle Bitcoin Market Crashes

In a scenario where the price of Bitcoin is crashing, what would be the best reactions to take?

Below are a few things an investor can do to weather the storms of a market crash.

Maintain a Calm State of Mind
Trading Bitcoin mandates that one has a disciplined mind state, meaning that your emotions must be in check at all times. Allowing your emotions to cloud your judgment in unfavorable market conditions is never the best option and in most cases, ends in disappointment and regrets. What you should do instead is take a break, evaluate what is happening and make logical decisions.

Most times, it is best to do nothing rather than taking an action that might end up going against you.

Try Not to Obsess
Sitting in front of your screens all day is not going to change anything happening in the markets. Spending time making analysis and plotting charts is fine, but don’t waste hours obsessing over the predicament you might be facing. It is advisable to engage yourself with something more constructive.

However, if you still have to trade, select a limit order and move on to something else.

Do Not Lose Focus of the Main Aim
The fact that Bitcoin may be facing a crash at a time does not mean that the overall demand for Bitcoin is gone, it is usually just a temporary downturn. The crypto market possesses the most assorted investor base of any other sector, it is safe to say that the market will almost certainly bounce back.

Always adhere to your trading strategy. Do not let the current situation drive you to make drastic trading decisions only for the market to turn around days later, causing you further losses or opportunities.

The crypto market is an extremely erratic playing field and huge plunges and rallies are always expected.

Best 5 Bitcoin Technical Indicators

Before we go into the details of the best indicators, we have to first understand what indicators are.

Indicators are instruments used in technical analysis to assist traders in predicting price activities. Simply put, indicators use mathematical algorithms to provide traders with what the market will probably do next.

Top Five Bitcoin Indicators
1. Ichimoku Clouds
The Ichimoku Cloud is a collection of 5 lines, with each line indicates historical averages, and the timeframe can be defined by the trader. In a case where 2 of the lines intersect, the space between the lines is shadowed thereby creating a “Cloud”.

There is an uptrend when the price is above the Clouds and there is a downtrend when the price is below the Cloud. However, in a case where the Cloud is flowing in tandem with the price, it is an indication that the trend is powerful.

2. Relative Strength Index (RSI)
This is one of the easiest indicators to use. This indicator shows when an asset is overbought or oversold. RSI utilizes past data in deducing the gross need for an asset. It also deduces if an imminent correction is going to occur in either direction.

3. Moving Averages (MA)
A Moving Average is an indicator that evaluates the average price based on a timeframe, reevaluating it as time goes on. A Moving Average is also necessary for deducing support and resistance level.

4. Fibonacci
Fibonacci, just like moving averages, is valuable when deducing the parameters of price activity. Even though Fibonacci might not be as intricate as some other indicators, it merits a spot on one list because of its uniqueness. The Fibonacci percentages are naturally occurring details and can be seen even in nature.

Naturally, anytime there is an abrupt change in direction in the price, a reversal towards the trend always seems to come next.

5. Volume
Volume is undoubtedly one of the most vital although underrated Bitcoin indicators. This indicator reveals the number of traders buying and selling Bitcoin. It is always advisable to examine Volume before getting into a trade based on any other indicator.

Day Trading Digital Currencies: What To Do and What Not To

A day trader is one who conducts multiple trades in a day to make a profit. This kind of trader is different from HODLers. A quick example is this, if you (as a day trader) buy a crypto coin, your goal will be to sell that holding before the day runs out for profit. These kinds of trades are usually carried out within hours or minutes.

Day trading is the direct opposite of HODLing, which is characterized by the action of buying and holding a cryptocurrency for an extended period, based on personal information and conviction. In HODLing, a substantial drop has to happen for the initial vested capital to be at risk.

In day trading, exponential profits, as well as losses can be experienced from sharp price activities.

Starting Day Trading
Getting an exchange to trade cryptocurrencies is no challenge. There is a wide array of exchanges for selection, one just has to sign up to use these exchanges. However, before you commit to any exchange, you’re advised to make sure that it meets all these criteria:

The locations their operations span.

Ensure the exchange supports traders from your location.

Find out what their transaction fees are. Some exchanges are known to charge excessive fees.

Find out what the withdrawal fees are as well.

Find an exchange that has a comfortable interface. Check what the charts and other features look like.

Tips on Day Trading Cryptocurrencies
Endeavor to follow trends. Trading with the trend helps you take advantage of the momentum.

Understand the behaviors of your selected crypto coins. Every cryptocurrency has different responses to events and news.

Make trades when volatility is on the high side.

Always set your profit targets and stop losses. This is a very important tip for beginner traders.

Tryout crypto trading bots.

Try to distant your emotions from your trading. Always maintain a cool state of mind.

Never invest money you’re not ready to lose.

Try to maintain a trading strategy and avoid moving from one strategy to another. Discover what strategy serves you best and work with it.