The market is experiencing a bloodbath today after $353 million worth of cryptocurrencies were liquated. In the last 24-hours, a total number of 183,239 investors got liquidated and indulged in massive selloffs. The development made Bitcoin plunge to $38,500 and reached its lowest levels since August 2021. Bitcoin’s fall dragged the whole crypto market down and many tokens dipped dangerously to double digits.
The situation is grim as investors are now seeing most of their profits being wiped away. For the ones who are still in profit, their portfolio has been reduced substantially. In addition, several financial analysts and media outlets are predicting that the market might continue to fall for days to come.
However, here are the top 3 things ‘not to do’ when the market crashes so you can keep stress at bay.
1. Avoid checking prices hysterically
The market crash is a stressful situation on its own and investors have a tendency to check the prices hysterically. This can add more stress and will drain you out mentally. Avoid checking the prices during a crash and limit it to viewing not more than five times a day.
Firstly understand that financial stress is much different than your work and family stress. Financial stress can make you take wrong decisions and give an illusion that what you did was right, despite it being wrong.
Studies have shown that people end up making the wrong decisions when they’re under financial pressure. On the other hand, the same study shows that people who wait for the right time despite their bad financial conditions, usually pass through the storm unharmed.
2. Don’t Panic Sell Because Others Are Selling
This is in continuation to the above point. Don’t make the wrong decisions due to financial pressure. Yes, there’s a flamingo effect of panic selling happening, and investors are jumping ship, but don’t sell your holdings for a loss. The market has its ups and downs and that’s the reality of it, that’s how the market works. There’s absolutely no escaping that fact.
Panic selling will wipe away your investments, give no value to your time and the only thing you’ll gain is stress.
Stick to your desired price goalpost and wait until your destination arrives. That should be your overall target and never let fear take the best out of you. The journey will have its own bumps and joyrides, but when the desired price arrives (no matter the time) it will be rewarding.
3. Never blindly ‘Buy the Dip’
Whenever the market crashes, memes about ‘buy the dip’ automatically crawl back to your newsfeed. Influencers flex how much they purchased during the dip and give an illusion that you’re missing out on massive wealth. Well, you’re not! Don’t do it.
The influencers that claim you’re missing out by not buying the dips didn’t do any research. They just quickly picked up their phone/camera and made a video about it, that’s about it. Blindly falling to the influence of ‘buy the dip’ is dangerous and will only wipe away your leftover savings.
Buy the dip only if you’re confident that a particular coin is at its best lower price and don’t fall for the whims and fancies of social media.