The cryptocurrency market experienced a significant downturn on April 12, 2024, due to a combination of factors. A **flash crash** occurred around noon ET, causing most tokens to drop over 10%. This was partly attributed to hotter-than-expected inflation reports earlier in the week, leading to an increase in interest rates and a drop in tech and growth stocks. Additionally, the U.S. Securities and Exchange Commission (SEC) issued a Wells notice to Uniswap, indicating potential legal action, which added to the uncertainty.
To help prevent loss in your cryptocurrency investments, here are some strategies you might consider:
1. **Diversification**: Spread your investments across multiple cryptocurrencies to reduce the risk associated with any single asset.
2. **Stop Loss Orders**: Set up stop loss orders to automatically sell your assets if the price falls to a certain level, limiting potential losses.
3. **Avoid FOMO and FUD**: Stay informed but avoid making decisions based on the fear of missing out or fear, uncertainty, and doubt.
4. **Set Clear Goals**: Define your investment goals and only trade within your means.
5. **Do Your Own Research**: Always confirm information from multiple sources before making investment decisions².
Remember, investing in cryptocurrencies can be highly volatile, and it's important to only invest what you can afford to lose. Holding ("hodling") can be a good strategy if you believe in the long-term value of your investments, but ensure you have measures in place to protect your portfolio from significant losses. Always consider seeking advice from a financial advisor for personalized guidance..