PANIC! PANIC! Everyone is in a panic because of the cryptocurrency price drop. My Facebook, Reddit and Twitter accounts are fully plagued by bitcoin memes about how crypto prices have fallen into an abyss, how all HODLers are lost, and that our hope and salvation have diminished. What should we do? Everyone is selling like mad and many are losing money in the process. STOP! Take the time to read and understand what is going on in the Cryptocurrency Market.
The cryptocurrency realm is vast. With so many people having their own agendas, and general uncertainty in the community, a simple answer for this question does not exist. If someone claims that they know the answer, they probably have an agenda of their own. So let’s focus on cryptocurrencies, and why prices drop or rise? This is a fundamental question everyone is asking about., Firstly, we have governments which are really ”afraid” of bitcoin and company (altcoins)., Secondly, we have so-called ”Wall Street Brokers”, the “Bad Boys” of Trading Market, the “Thanos” of cryptocurrency story (at least they claim to be but such, as well as big changes with some coins, like what has happened with bitcoin cash hard fork lately.
I can continue counting what could cause price drops or rises for the whole day long, and eventually, you’ll get bored. But you see, there are reasons that directly influence price changes. No one can be certain and sure what tomorrow will bring. Fake news from a big name. Some drastic change with a coin and etcetera. One thing is certain, we need to keep fighting for our rights because cryptocurrencies are THE salvation!
When it comes to people, there is one catalyst that drives certain occasions to happen – Fear! People are afraid of losing money. Now, most people are greedy and jump right into the idea of cryptocurrencies, but they do not think that this is a pure investment, and they should be ready to “risk” the money involved in it. Let’s get to today’s case with bitcoin price.
The price today is R62,736.15 or $4465; The lowest the price of Bitcoin has been since it’s 2017 peaks. Now, everyone is panicking that this is the end of cryptocurrencies because the price has dropped. Everyone is on cryptocurrency exchanges selling their assets as if cryptocurrencies aren’t expected to be highly volatile. Imagine, thousands of people in panic lets get the current price as minimum R62,736.15 and those people want to get rid off their bitcoin, because of fear that they could lose more money. They sell their Bitcoin for example at R62,100 but someone else drops their selling price even more just to be able to sell it. This scenario repeats itself and becomes a huge wave of panicking people trying to sell their Bitcoin out of fear of losing more money.
On the other hand, there are people that are not so sure if they need to buy, because of the mindset “If I buy now and prices do not go up? I will be screwed”. So, the price continues to drop, until it reaches the dead-point where people in fear are fewer and now there are brave buyers who are starting to buy.
The same example applies whenever the prices start to go up. Now, a greedy buyer is ready to invest without thinking of the actual outcome. Let’s buy before prices are too high and then we will sell. That’s some easy money. Yeah, call for a restaurant reservation, because we are rich, and will drink and eat whatever we want. Sellers see the opportunity that there are a big amount of people ready to buy. They set the price little higher and wait to make a little more money. Let’s get the same price as today: R62,736. If bitcoins are sold for that price and there are people who seek the opportunity, they are going to set more for sale, but with higher prices, like R63,123. Other sellers will rise a little bit more and again it will have a wave effect.
This is a plain example of the Mob Mentality. Wherever one wolf goes, the flock of sheep follows. No matter if the prices are going up or down people will aimlessly follow whichever reputable trader they deem as an alpha. The difference is that in one case there is fear and desperation, in the other case there is hope, greediness, and drooling. Even in the game ‘World of Warcraft’, this remains true.
I’ll Elaborate. Let’s look at the example of most sold item: Runes. The main intention of selling runes is to make more in-game currency. In our case, these runes are Bitcoin and Altcoins. You either want to sell or you want to buy, it doesn’t matter. What actually matters are all of the outside influences that are causing these price changes. Much like rumours that there will be a patch with better runes, then finding them to be completely useless once they are released.
When we look at the biggest mobs that plague the cryptocurrency space, it often looks like this;
Bitcoin is a big bubble that eventually will burst and everyone will lose their money, so do not invest.
How could anyone know that without serious evidence? If there ever was evidence supporting a claim like this, it’d likely be all over our newsfeed. This is all just assumptions based on emotions. The best trading advice anyone can give you is to do your own research and only trade money you are willing to lose. If you’re only judging the potential of cryptocurrency based on its price, you’re most likely going to lose your money. Doing this is akin to driving your car on the wrong side of the road. It may go smoothly for a while, and you may even dodge a few cars in the process, but eventually, you’re going to need to either stop your car or change lanes.
There are many people who will continue to hold their cryptocurrency or mine even when the prices are at their lowest. HODLers are people that understand the true potential of cryptocurrency, and hold on for the ride regardless of its ups and downs. This is a battle between the bulls and the bears. Panic selling at the first sign of danger will only lose you money and is often never a good idea. These people understand this, and HODL for dear life as they know mainstream adoption is inbound and it’s only going to get better from there. Letting your financial decisions be dictated by the feeling of fear will only end in depression. Bitcoin is a wealth creation mechanism. But first, you need to understand it and see the technology behind it. 10 years ago a single bitcoin cost fewer than R15 but today it’s worth vastly more.
This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.