2020 has been an extraordinary year for cryptocurrency. Since last January, crypto asset market capitalization has quadrupled. However, there are times when the Bitcoin price drops suddenly which is driven by several factors. In this condition, of course, the question arises: What is the Bitcoin investment strategy when the price drops? You can learn more on our website at http://www.forexkenya.net/bitcoin-kenya.html.
The price of Bitcoin may have skyrocketed like a rocket this time of year. However, the sky was not always clear. There are times when the Bitcoin market crashes and collapses, like what happened in 2018, where the price of the king of crypto assets dropped 65% in just a month. Hence, the current rally in price is sure to reverse at some point. It’s just that many investors don’t know when that happened. They may think that when the weakening occurs, the best thing they can do is take a step back and wait. In a bullish environment, the best investment strategy is to buy and hold the crypto assets that you think are making the most money. But when prices fall, you have to take advantage of the trend. Experienced investors usually increase their Bitcoin portfolio during this period. The trick is to buy more coins when the price is low and sell them as soon as they hit the top of the trend.
Although this method can produce consistent results, it is proof that trading is not for everyone. To be successful in swing trading, you need to start understanding the basics of technical analysis. It will give you the best entry and exit points on the market. Shorting or short selling can be thought of as the opposite of buying a cryptocurrency and expecting its price to increase. This Bitcoin investment strategy is one of the most common methods of profiting in a sluggish market. Here’s how it works: When shorting, you borrow funds from a crypto exchange and sell the asset at the current market price. For example, if the Bitcoin price remains in a downward momentum, you can close the position at a later date. Then you buy back at a lower price and cash out the difference as profit.