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Should we buy when BTC crash or correction?

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Written by   44
2 months ago
Topics: BTC
Monday 9 may 2022
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On May 9, 2022, bitcoin is still experiencing a crash that makes other coins of course also go down.

[ Source image ]

So, what needs to be done if a Bitcoin Crash occurs? I buy BTC when the crypto market crashes? Generally, when a crash occurs, investors and traders tend to sell some or even all of their assets.

However, seeing Bitcoin soar in the last few weeks has led some to compare the current state of affairs to what it was four years ago. After the expected rise came as a surprise, BTC's value fell by more than 70 percent in 2018.

In principle, there is no guarantee that Bitcoin will not plummet in the next year. You can also sell or buy when Bitcoin or other crypto assets crash. Even so, make sure before doing it you have researched and made careful planning and not in a hurry.

Bitcoin Crash

A crash or fall event is widely considered in traditional finance as a price drop of more than 10% over a single day. These are often triggered by market-impacting changes that cause panicked investors to exit en masse. That is one of the differences between a crash and a Bitcoin correction. Technical factors can indeed have a dramatic effect on the price of Bitcoin.

However, the sharpness is caused more by existing circumstances, such as macroeconomic events, large company announcements, and changes in international regulations and policies.

Bitcoin Correction

The correction is characterized by a gradual decline in which the price drops by more than 10% over several days. This usually indicates that bullish investors and traders are 'exhausted' and need time to consolidate and recover.

'Exhaustion' occurs when the majority of buyers have bought the underlying asset and no new buyers have emerged to support the uptrend. If sell orders keep piling up with no one on the other side of the existing order queue, then the price starts to fall.

Corrections can be affected by minor events but are caused by factors. For example, buyers who experience a strong resistance level, or trading volume that is dwindling.

There is also a negative divergence between the price of Bitcoin and indicators that measure its momentum such as the Relative Strength Index (RSI).

Bitcoin Crash vs Bitcoin Correction, What's the Difference?

The difference between a Bitcoin crash and a correction actually lies in the magnitude of the impact on the crypto asset trading market. A Bitcoin crash is a more serious event than a correction.

A crash in the market can lead to a drastic price drop in the long term that hurts crypto asset owners. Another case with corrections. Generally, the price drop that results from a crypto correction is only about 10 percent and occurs over a shorter period of time than a market crash.

Is it better to buy coins on crash or correction?

These two moments are often used as great opportunities for novice traders or investors to buy BTC and other crypto assets that have been impacted by crashes or corrections.

The reason is, the decline in the price of crypto assets by more than ten percent without the need to be afraid of being hit by this loss is the right momentum to buy a number of crypto assets.

So if you want to buy when the price is crashing or being corrected, it's better if we have to think carefully first.

Overcome panic selling and buying and selling because both can make mistakes and bring regret. Feel free to point out or be aware of a more skilled person before buying and selling assets when market conditions are not.

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Written by   44
2 months ago
Topics: BTC
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