The crypto market sees red – where you invest next will depend on what type of crypto investor you are

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Relatively established cryptocurrencies, including Bitcoin, fell 20% last week. While many coins still struggle to recover, this is a “buy down” opportunity for many. Depending on how the decline has been used, there are three types of crypto investors. The value of crypto assets rose nearly $ 1 trillion from August through November, ahead of the big splash seen last week. While the first instinct of most investors may be to sell and cut their losses, experienced traders take advantage of these opportunities to ‘buy down’ – grab cryptocurrencies at a low price before the next bull run.

“Many market players are taking advantage of the situation and rushing to stock up on cryptocurrencies from the top 10 list on a draw, as various indicators indicate,” said Johnny Lyu, CEO of the exchange. KuCoin cryptocurrency, at Markets Insider.

All investors should, of course, do their own research before making any kind of investment, cryptocurrency or whatever – that’s why it’s important to know when to HODL – hang for life – when to buy and when to sell in. depending on your risk appetite.

What crypto to buy today? A cryptocurrency becomes more valuable when demand increases. And, while there are different push and pull factors in the market, most cryptocurrency adoptions – as well as cryptocurrency investing – fall into three categories.

A cryptocurrency that serves a purpose, even though small Bitcoin is seen as a cash equivalent asset for businesses, Ethereum stands out for its support for third-party NFT platform developers, Binance Coin has the weight of its exchange behind it, Solana becomes part of the DeFi sector, MANA is native to Decentraland’s metaverse games, Monero is accepted as a means of payment on the darknet, etc.

Within the crypto community, those who invest in cryptocurrencies by betting on the underlying solution are called the “true believers” – because they “believe in technology”. They have read white papers, understood tokenomics, analyzed fundamentals, and are rewarded when they identify a currency with a use case.

A cryptocurrency that is conceptually appealing Terra’s LUNA manages its stablecoins, Uniswap and Polygon make new types of transactions possible, Filecoin builds cloud storage, and more. The first investors who identify a promising project could potentially win when its value becomes more widely known.

Investments of this type carry a bit more risk due to the lack of historical data. However, they also offer higher returns on making the right call, as investors enter before a cryptocurrency goes mainstream.

A Cryptocurrency That Is Irrationally Popular, And Yet It Thrives Dogecoin appeared like a joke, Shiba Inu has its “WoofPaper”, Ethereum Classic has gained confusion, and Namecoin has fallen from the game’s fourth biggest name in the 805 chart Many of these coins will rise in value for no intrinsic reason and fall when investors choose to move to safer shores. The danger is that such parts never bounce back, after spending a season in the sun.

However, for day traders, volatility is an opportunity to time the market and make money on bulls and thoughts. Such altcoins are the riskiest part of a crypto wallet.

What should you do during the crypto market crash? For true believers, who are sure that the coins they have invested in are good to hold for the long term, a fun but tempting strategy is to “be greedy when others are afraid, and greedy when others are greedy.” This would mean using the current drop in coin value to buy more coins.

To those who had bought parts at lower prices and saw a huge increase, “keep your powder dry” might seem right. This means withdrawing some or all of the profits to safer shores, to wait and watch for new investment opportunities in the crypto market.

Those with a low tolerance for risk may find that now is the time to spend more time learning about the coins they have in their wallet. This would help identify what would generate low profits, what should fall further and, for example, whether the time is right to buy more Bitcoin which is approaching its next ‘halving’. Last Week’s Crypto Bloodbath Over the past ten days, including the week of November 10-19, the crypto market’s bull run – which was in full swing – came to a screeching halt. The most affected cryptocurrencies have seen their value reduced by a quarter if not more.

Excluding stable coins, 89 of the top 100 coins saw red to varying degrees, with similar distress seen in the hundreds of other coins commonly traded on crypto exchanges. Unlike the stock markets, crypto trading doesn’t stop at night and there are no regulatory “circuit breakers” to reduce volatility – it’s 24/7.

The only cryptocurrency to turn the tide was Avalanche, which on November 22 at 3:30 p.m. India Standard Time (IST) pushed the Shiba Inu and Dogecoin coins out of the top 10 with a market value of 3. , $ 6 billion, according to CoinMarketCap.

For context, all of these coins have slowly regained some of their lost value, although they are far from their all-time highs in early November. The overall market value of all crypto assets is down to $ 2.6 trillion from the nearly $ 3 trillion high seen this month. Despite the drop, it is still almost 50% more than in April 2021.

Why is the crypto market down today?

Analysts speculate that last week’s drop may simply be due to investors “taking profits” and cashing in some of the coins they owned. Others believe growing concerns about regulatory crackdowns in China and expectations of new crypto laws in the United States and other countries could boost the market.

“The current market scenario is the result of several factors, including China’s crackdown on crypto, the tax provision in US infrastructure law, and panic selling. All of this irregularity comes down to one point, which is that investors are using the word social media instead of the proper analysis of the project. “

Cashaa founder and CEO Kumar Gaurav told Business Insider US

This may not necessarily be a problem, as most of the top 100 coins have maintained a large daily trading volume despite the drop in values, according to data from CoinMarketCap, which means that trading interest persists despite the downturn. price drop. “So it is too early to talk about a general market transition to a bearish phase, as institutional investors maintain their cryptocurrency portfolio positions,” said Lyu. Bitcoin – the barometer of crypto performance is. gold “in the crypto world, Bitcoin is widely held and constitutes over 40% of the total market value of all crypto assets combined. Its position ensures that Bitcoin has generally been a part of every bull and bear market for the past 10 years. years since it began to be traded.
The chart shows that Bitcoin peaked in late 2013, late 2017, and late 2021 – periods that correspond to bullish periods across the market, increasing investor participation and market values. most cryptocurrencies.
CoinGecko This historical trend shows peaks followed by declines, with some trends continuing for years – so some people who have held – or held – a reliable coin have seen larger-than-life returns, although it took a few years. While timing the market is not advisable, most of the investors who have followed Bitcoin’s wake this year and invested in altcoins were in for-profit territory at the end of October. Additionally, most coins are already starting to recover in value, so a renewed bullish run in December may still be possible – at least according to the far-fetched predictions made for the price of Bitcoin by billionaires, influencers and retailers. analysts. Regardless of the type of crypto investor, the recent one-week drop has shown that the eponymous ‘hopium’ is no longer enough to make gains – simply hoping for bull runs that raise all the coins is a rarity to as the crypto market matures. The next one could arrive in months or take years to climb the charts again. Disclaimer: Do your own research (DYOR) before making any investments, cryptocurrencies or the like. This article is for educational purposes and not intended to be financial advice.

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