If you've been keeping a close eye on the cryptocurrency markets as of late, you can see just how volatile the industry can truly be. Just in the last 7 days, Bitcoin alone has swung from around $2,720.00 to a low of around $2,250.00! And as cryptocurrency investors know that when Bitcoin or Ethereum swing in value, so do many of the alt-coins that are tied to them! So, how the hell do you survive such volatility? Well, you could always hope for the best and shoot for the moon? Or, you could apply some quick and dirty logic to the markets and time your investments properly.
Whether you have $100, $1,000, or $10,000+ invested in a bear market, doubling down on the dips of the crashes could very well help you average out your gains/losses, and potentially come out way ahead. As of today, 6/26, there are dozens of coins at an all time low! Doge, SWT, Digibyte, ANS, PTOY, CANN...I could go on! These coins are at incredibly low prices, and while your portfolio may be hurting, if you have any extra capital available, get it into some of these coins immediately.
Exchange conversions during crashes could spell massive gains as the prices fluctuate so quickly, the rates are often quite different. If BTC is $2600 on Bittrex yet $2350 on Poloniex, you could make some incredible 5%, 10%, or even 20%+ portfolio gains just by arbitrage between the exchanges!
One thing most people forget is that we're not simply purchasing in fiat and correllating that to a single stock option. Unlike the traditional stock market, the fiat you initially invest in isn't fluctuating wildly! However, in the cryptospace it does! Once you put your fiat into either ETH, BTC, or LTC, that currency immediately begins its transformation in value. The ideal time to convert and sell between the two is when the one you are holding is high, and the desired purchase is low. This would be assuming the purchased coin would then increase in value.
In the cryptospace, BTC is the most widely used coin for currency. You use it to virtually purchase 100's of other alt-coins. So, it would make sense to do so when BTC is as high as it can be, and the coin to purchase is a desired low entry point. This same principle should also apply for converting between the big 3. Just because you see DOGE coin at an all time low doesn't mean you should convert all that hard saved ETH you got near the $400 cap just to buy some DOGE and hope for a 60% gain. Always do the math and weigh out your conversion profits potentials!
In Summary...
At the end of the day, there are no hard-set rules to trade by. Everyone has their own tricks, tips, and ideas for approaching the wild wild west known as cryptocurrency trading. However, if you slow down just a bit and think through some of the more intricate specifics (especially during a blood-in-the-streets time such as a crash/dip!) then you can very easily come out way ahead!
Happy Trading!
