This past week, crypto investors and traders were again surprised by the significant drop in Bitcoin prices. This is not without reason, so Bitcoin fell again to touch $49,000.
There are several factors that influence the current volatility of the crypto market, including:
1. Geopolitics and Recession
Rising geopolitical tensions are creating global concerns and the crypto market is definitely feeling the heat, making investors more cautious and wary of upcoming risks.
2. The Fed Cuts Interest Rates
There are concerns that if the US does not cut interest rates soon, the US could potentially enter a recession. This has confused the market, which previously hoped for a rate cut. However, because of the uncertainty of the Fed, it has driven investor concerns about volatility and caused the crypto market to plummet. In addition, the number of institutions entering crypto has made its pattern follow traditional investors.
3. Mt.Gox and FTX Compensation
The news of Bitcoin distribution compensation from Mt.Gox and FTX affected market liquidity, increasing selling pressure and uncertainty among investors.
4. Unemployment Spike in the US
The unemployment rate in the US suddenly rose, making people worry that the US economy is slowing down faster than expected, this is seen with the unemployment rate jumping to 4.3%, the highest since October 2021. Wall Street reacted with a price drop and the crypto market also fell.
The effects of these factors are what put significant pressure on the price of Bitcoin and caused the crypto market to plunge. But behind the concerns of investors, back to their respective strategies, some consider this an opportunity to add ammunition at a lower price.
However, some investors often feel confused about the steps to take and even panic when a significant decline occurs.
Well, there are several strategies that might help when facing a downturn:
1. Keep Hodl
Holding assets or the term often known as “hodl” is the simplest strategy without being affected by short-term price fluctuations.
2. Trading Opportunities
When the price goes down we have to be able to take advantage of the trend by short selling, we look for a good entry point to buy at a low price and sell it once it reaches the top of the trend.
3. Increase Portfolio
Experienced investors usually increase their Bitcoin portfolio during this period. The way to do this is by buying more coins when the price is low.
4. Passive Income
When assets fall, you can stake or farm to get rewards or returns while waiting for the assets to rise again.
To be even stronger, there are several tips that can be done when facing market fluctuations.
1. Also take the time to learn about crypto projects, deepen your knowledge of market analysis.
2. Stay calm and don't panic in making decisions
3. Don't forget to always DYOR before making a decision to invest.
Implementing the strategies and tips above can at least help when the market is experiencing volatility.
