I have made a video summary talking about the same subject on YouTube.
Today is Saturday the 27th jan 2018 and as you all know a couple of days ago cryptocurrency was facing what traders call a correction in the price or simply put a massive decrease. Minus double digits through out. All hell broke loose in the community. Some people were positioned to buy the dip and some were scared enough to sell in a lower price. There are also people that just watched and waited. HODLED if you will. I would like to address both states and explain what YOU can do to prevent looses.
I already know that most of the community knows what holding means, but for the few select that are beginners in the cryptocurrency space. It means holding your coins and believing in the potential that cryptocurrency has. Pretty much buy and forget.
I will be using Litecoin’s price chart (30 minute chart) as an example to illustrate a point. Let’s have a look (in euros). I want you to look for a second and see if there is a recurring pattern in this chart. Take your time and really try to find a repeating pattern. As you can see the price goes up and down all the time. Illustrated point
The repetition cycle might be happening in an increasing trend where we hit higher and higher price points at every interval or it might be on a decreasing trend where the price hits a lower and lower price point. This is all to be expected and you need to understand that if for example we are hitting a downwards trend, as three days ago, what could happen next? As you can imagine the next step would be an upward trend. And it happened indeed.
Ok, OK this is can be scary at times. No-one can ever guarantee that the price is going to go up or if the price is gonna go down, we are not talking about science, just pure speculation. That’s why you should always invest in something that you believe and you see yourself using in the future. I know crypto is different than anything else but you could treat it as something physical to prevent looses. For example let’s say that you bought a phone at 1000 dollars. You use that phone every day…will you really care if the phone's price goes up or down? You still got what you payed for?
That’s where holding comes at play. Because the price of the phone after it's release is only going to go down. What about Litecoin? Litecoin was sitting at $3,66 one year ago. If you were to lock your investment a year ago and only see it today you would find steady daily increase of 0,0108% (197$). Let’s say that Litecoin can have half of that daily increase for the next year ie. 0,0055% (1455$). Is that realistic? Could it happen? Who knows. Look at other coins. Have they done it before? Can they do it again? Do you think that Litecoin can hit a steady daily increase of 0,0055%? It’s up to you to decide. Now the real question is "Would you sell on a dip?".
Let me clarify that I am NOT a financial advisor and that this is pure speculation. You are responsible for your own actions. And PLEASE do research before you invest in anything and as always, invest amounts that you are willing to loose.