3 Belief-Shaking Truths You Should Know About Market Volatility
The most popular and common feature of cryptocurrency assets and/or markets is volatility. Volatility cannot be separated from cryptocurrency except when we talk about those cryptos referred to as stablecoins. Shockingly, we saw recently how some stablecoins became very unstable. But that's a story for another day.
Stablecoins are those crypto assets that do not experience huge price fluctuations. They usually have a fixed price - one dollar. Stablecoins could be backed by Fiat, backed by crypto or algorithmic-based. Regardless of what backs them, the goal of every stablecoin is to maintain parity with $1. When it loses its peg then it is no longer a stablecoin.
Whereas, conventional crypto assets are usually volatile. This means that they can always increase in price or go down drastically in price. For this reason, many say that crypto investment is a risky one so, they even decide to stay away from investing in them.
In this article, I will be discussing some hard truths about market volatility.
Market Volatility is a Necessary Evil
Volatility in crypto assets can be in two ways, that is, either increase or decrease in price. All of the time, investors only want assets to pump in price. No one wants the crypto market to crash down in price especially after investing in an asset. Hence, whenever a crash happens, many people wail and they even lose money. So, this set of people say that market volatility is bad and should not happen.
On the other hand, volatility in crypto prices is also good for a good number of investors. This is true because it allows many people who missed out on a certain strong project to have a good entry point. Investing is best done during crashes, that is, when the price of assets must have declined tangibly in price valuation. You don't buy at the top of the market.
While market crashes are bad for some, it is an opportunity for others. So, it is something we want but also do not want.
Market Volatility Will Not Stop
As long as cryptocurrencies exist, there will be no ceasing of market volatility. This is something everyone should always know. Stop wishing markets don't crash because assets will always go up or fall in price. Human beings are those trading these assets and they will always respond or react to both fear and greed.
While greed and FOMO in the market lead to volatility in the vertical direction, fear and FUD cause price declines. Also, dips could happen because of markets/whales' manipulation. Be aware of these and always apply wisdom in your trading activities so, you're not caught on the wrong side when prices fluctuate.
Hence, market volatility is not a question of if, it is rather a question of when and how deep.
Take Advantage of the Trend
It has been established that price fluctuations will always happen in the crypto market and they will never stop. As a crypto enthusiast, it is always wise to take advantage of whatever thing the market presents. Learn to take profits when the land is green and also devise ways to preserve your profits. Also, the accumulation of good assets during dips is never a bad idea.
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