5 Coinbase Tips on How to Handle a Crypto Downcycle – Converted Organics (COIN)

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Crypto exchange Coinbase Global Inc (NASDAQ:COIN) has shared five key ways to minimize losses in a crypto down cycle.

What happened: Large-scale liquidations and brutal selling have defined the last few weeks in crypto. According to Coinbase, there are a few strategies traders can use to weather a downturn like this.

1. Don’t fall prey to FOMO and FUD: FOMO (fear of missing out) and FUD (fear, uncertainty, and doubt) are common terms in the crypto space and can have a greater influence on investment choices. buying and selling, says the exchange.

Traders should remember not to make decisions based on negative sentiment caused by FUD or wishful thinking caused by FOMO.

2. Set Clear Goals, Diversify, and Trade Only Within Your Means: No matter how confident you are in a particular asset, you should never invest more than you can afford to lose, Coinbase says.

The exchange recommends strategies such as dollar cost averaging (the process of buying or selling small amounts at regular intervals) and setting key entry and exit points in their trade.

3. HODL-ing and long-term thinking: Coinbase has advised against accounting for paper losses, or unrealized losses, if the value of the asset falls below the purchase price.

Holding for long periods of time has so far been a proven strategy, with Bitcoin (CRYPTO:BTC) emerging as perhaps the most successful major asset of the past decade, Coinbase explained.

4. Be prepared to ride out the dip or take profits: Coinbase explained that investors should consider converting some of their most volatile crypto holdings into stablecoins to “lock in” their balance and reduce risk.

“But also remember that selling all at once, called a capitulation, can easily cause crypto holders to lose if the market suddenly rebounds,” the exchange said.

5. See opportunities: Even in a falling market, there are still profit opportunities if you know where to look.

Strategies such as short selling, staking, and DeFi yield farming and taking advantage of small price spikes with the right technical analysis can prove rewarding for investors.

Price Action: As of Thursday morning, Bitcoin was trading at $36,600, down 3.34% in the past 24 hours.

Photo by Kelly Sikkema on Unsplash.

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