Bitcoin’s price experienced a significant drop early in the morning of March 3rd, dropping to around $22,000 in a very short time.

This confirmed one prediction in particular. So the prediction is that Bitcoin’s course is about to make a directional decision. The cryptocurrency is trending down about 4% in the last 24 hours of trading, marking the biggest bitcoin sell-off so far this year.

This shouldn’t change much for a professional investor’s strategy, but it’s a little different for new investors. For new investors in the crypto market, bitcoin stocks Recommended for entry instead of investing large sums of money across bitcoins.

An overview of the latest developments

  • A long BTC position of over $62 million was liquidated in a matter of hours.

  • This was the third liquidation cascade in the last 12 months, following Terra’s crash in 2022 and FTX’s bankruptcy.

How do you proceed now? Prediction is very difficult. There is also clear talk of overselling, which should level off again. Meanwhile, the negative funding rate currently gives the buyer camp a high incentive for new entrants to Bitcoin.

Many investors are hoping for a temporary price recovery, and the positive signs in the US stock market in the immediate aftermath of this Bitcoin crash underscore this scenario.

Overall, the course of Bitcoin remains uncertain in the coming weeks and months. Analysts see both positive and negative sides that can affect prices. Investors should therefore monitor developments closely and adjust their investment decisions accordingly.

Corrected by short shock?

Bitcoin network fundamentals are stable despite recent price corrections and negative headlines. Network activity shows that the hash rate, which measures total computing power on proof-of-work networks, continues to climb.

Since November 2021, the hash rate has nearly doubled, but the price has fallen significantly over the same period. Despite the current market conditions, the number of active addresses on the Bitcoin network has also increased, indicating increased demand and usage.

Fundamental Data as the Most Important Variable? Positive Fundamental Metrics of the Bitcoin Network Could Cause Prices to Rise Again Soon. Also Crypto Banks Are Fairly Small and Their Impact on the Market as a Whole Is Limited , the adverse effects of the Silvergate problem may be limited.

The Bitcoin options market is also somewhat calmer, reducing the risk of panic selling and large liquidations.

Additionally, there are other indications that Bitcoin could rise again soon. A key factor is the high demand for the Bitcoin ETF, which has grown steadily since its launch in October 2021. Institutional investors have also shown growing interest in Bitcoin, which is reflected in increased trading volumes in the futures market.

How can Bitcoin investors act during the unpredictable phase of development?

Below are some approaches that investors can pursue during such stages.

Diversification: Bitcoin investors need to diversify their portfolios to protect against unpredictable developments in the cryptocurrency market. Diversification can be achieved by purchasing different cryptocurrencies such as Bitcoin, Ethereum, stocks and other asset classes.

A stop loss order helps minimize the risk of loss by automatically triggering the sale of bitcoin whenever the price falls below a certain value. In times of high activity or high volatility, we cannot guarantee a sale at your desired price.

Those who use technical analysis can also spot patterns and make decisions: In-depth technical analysis can help identify market sentiment and make informed decisions about buying or selling Bitcoin. help. Key support and resistance levels are important.

Overall, risk management is particularly good. Bitcoin investors should have a clear understanding of how much they are willing to risk and how much they are willing to lose.

These cannot change long-term strategies and investor success if investors adapt to events such as Silvergate, FTX, and similar ‘crises’.

By Jules

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