LESSONS LEARNT FROM THURSDAY CRYPTO MARKET CRASH
Thursday, May 13, 2021, was not a good day for many cryptocurrencies investors and traders. While many anticipated a dip because of the eid holidays, not everyone thought it would be this bloody.
The week started with a positive note as many coins and tokens gained but the events that followed Vitalik’s donation of meme tokens sent to his public wallet, the eventual crash of SHIB and related meme tokens value, Elon Musk’s tweet about Tesla not accepting Bitcoin anymore sent the market into a sudden dump that lingers even till the moment of writing this article.
I have curated a list of lessons I learnt from the events and I hope you find them useful. It should be noted that they are not financial advice however and you are responsible for the results of your financial decisions.
IF YOU ARE A PAPER HAND TRADER, YOU SHOULD AVOID CRYPTO
Many people started panic selling their coins and tokens especially BTC immediately Elon announced that Tesla won’t be accepting BTC anymore. Because Tesla and Elon own a large portion of BTC, people feared that a whale size withdrawal could crash the value of the coin so they sold off their coins. While this looks like a good decision for now, it is not a good strategy for Crypto holders who are thinking long term.
https://twitter.com/elonmusk/status/1392602041025843203?s=20
FUD (FEAR, UNCERTAINTY AND DOUBT) IS CERTAIN AND TEMPORAL BUT GUARD YOUR COINS STILL
It is not uncommon for big players of a market to shake it through rumours or dumping their positions so they can buy back at a lower price. At the time these coins pump again, you will FOMO and buy the top.
YOU ONLY LOSE WHEN YOU SELL
1 BTC remains 1 BTC no matter how the price fluctuates so rather than panic sells at the slight of a dip, leave your coins alone. You should not treat your wallets and exchange apps like your Social Media apps too, you might be tempted to sell off your assets.
PREPARE FOR DIPS DURING WEEKENDS AND HOLIDAYS
If you studied the charts of major coins for almost four weekends, there are usually dumps during weekends. There is an Eid holiday and a long weekend for many, it is just logical that many people will sell off their coins in exchange for fiat currencies to enjoy the long weekend. Although I was expecting a dip, I didn’t expect it to be this bloody.
IF YOU HAVE MONEY TO SPARE, CONSUME THE DIP PLEASE BUT BE CAREFUL
Buy the dip but ensure you understand you conduct adequate research.
DON’T JUST BUY A COIN OR TOKEN, UNDERSTAND THE MARKET FIRST
If a coin market is experiencing a “correction”, (a sudden bullish or bearish run) understand why the reasons for this correction rather than just buy because you don’t want to FOMO. When SHIB pumped, many bought it because it was the trending token without understanding fully the coin’s history and circumstances.
I strongly believe that if many retail BTC holders understand why we are experiencing this dip, they may not sell off because eventually, it will be corrected.
HONORARY MENTION; COINS AND TOKENS THAT I HAVE MY EYES ON
- BTC because why not? 🙂 It will pump eventually. The community is strong also.
- ETH because many of these meme coins depend on its blockchain.
- XRP because mining it allegedly consumes less power than other coins and it could Tesla’s next plaything.
- Doge because even without Elon’s hype, the coin seems quite reliable. Its community is quite strong also and yes, there is still the Elon hype.
- BNB because it is an exchange app, people will need it eventually when the blood rain is over. 🙂 In fact, all major exchange coins and tokens.
Be on the lookout for coins and tokens with backings from strong institutions. $CELO for instance partnered with PwC recently.
I am open to answering questions, comments and learning should you find any error in my submissions.
Amos Adejimi
