The Crypto Market is Bouncing Back. Here's How You Could Leverage This
The Crypto Market is Bouncing Back. Here's How You Could Leverage This
Last week was a very peculiar time for the crypto market. If you’re active on social media, you would have come across a number of tweets poking fun at how the market was ‘seeing red’ or memes about how crypto holders had been reduced to poverty, and even the official Binance Twitter account making jokes about the dire state of the industry.
While crypto lovers reacted to the situation with jokes, the recent market downturn was nothing to laugh at. Cryptos from across the board saw a massive dip in price. These included usually reliable tokens like ADA, ETH, and even BTC saw a slump, dipping to under $40,000 per token after seeing its most recent peak of over $65,000 per token just weeks before.
The script played out the way that it usually does, which is that crypto users have a momentary panic and laugh off their woes, crypto deniers announce the demise of the industry, and the market slowly but surely recovers (as it has done in the last few days). We have seen this happen multiple times in the past, but what does this mean for you as a crypto investor? How can you make sure you benefit from the current recovery of the market?
The Anatomy of a Crypto Market Recovery
All capital markets, stock market or crypto, see periods of downturn in which most of the top assets do not perform well. The crypto market is known for being particularly volatile and bitcoin has seen several bear runs, including one in 2020 that saw the price fall to around $3,000 per token.
Many things cause these crashes to happen; a global pandemic, general pessimism within the market, Elon Musk tweets. They are an almost inevitable part of the process. What is also inevitable is that the market will recover at some point. We are already seeing this with most tokens starting to increase in price again, even if the losses sustained have not been fully recovered.
How You Can Ride the Wave
There is always money to be made in the crypto market, especially in recovery. This is because two things are simultaneously happening at the moment. First, while a lot of tokens are recovering, most have not fully regained their pre-crash price, which means that you can buy some tokens of your choice for cheap. ETH, for example, broke about $3,000 per token not too long before falling to below $2,000. For anyone looking to buy into ETH for cheap, now would be a good time. This applies to many tokens that are in the red still.
The second thing that is happening is recovery. ETH might have fallen below $2,000 but it is fast on its way back up and since historically, it has been proven that ETH can indeed break above $3,000, anyone buying into it now, has a decent chance of making a good profit from their investment.
You can also use this as an opportunity to explore newer tokens that they might not have wanted to spend a lot of money investing in but can now take a risk on without too much financial cost. If you invest in the right tokens, you can see your investment significantly increase in the coming weeks as the market returns to its previous state.
Ultimately, leveraging a market crash and subsequent recovery is all about how you see the market and recognizing that every situation is an opportunity for progress. A crash can signify that the market is dying or that there is a window of opportunity to buy low and sell high later on. If you leverage this opportunity well enough, you can reap the benefits of the industry.
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Take the long view and focus on the fundamentals. The rest is a matter of patience.