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
