Will the bitcoin crash? When will it happen? How risky will it be for traders? Should you sell or keep buying?
If you have made these questions, you are on the right path. To get better results, questioning everything is key. In trading, especially with bitcoin, uncertainty is everywhere.
When we look at the long-term value, however, things change. Regardless of the current events, the market shows more consistent results as more time passes.
People don’t lose money because of bitcoin crashes. They do because they don’t give enough time to learn from it and create a strategy.
Is Bitcoin about to crash in 2020?
When it comes to predictions, the market comes down to pattern recognition and mass psychology. Remember, the main cause of any economic change depends on the people behind the broad market.
Although trading requires logical thinking, the market is quite emotional. It’s the reason the Bitcoin crashed in 2018 and why it could happen again. Knowing that cryptocurrencies are volatile, the risk increases.
Then, should you stay away from Bitcoin?
Everything involves risk. The more uncertainty there is, the bigger the reward. As long as you follow the right strategy, you can make money trading Bitcoin.
Bitcoin may crash any time this year. The cause could be security, competition, or mining efficiency. However, that should not stop new traders from joining the market.
Most world-class figures have great projections for Bitcoin. Some conservative minds estimate it to be worth around 20 thousand by the end of the year. Others like John McAffee believe it will reach the million-dollar mark.
It’s not a secret. As technology improves, Bitcoin will become more reliable, and other dealers will start perceiving it that way. Experts expect most cryptocurrencies will grow in the long term.
You could feel hope, greed, fear, or regret. The key is to keep a balance between confidence and skepticism. The question is, what are you going to do about it?
How to create your own projection
If there’s something certain in trading, it’s research. As Ray Dalio would say, you need to think for yourself about what is true.
When analyzing the reasons for failure, 80% of traders who lost money were following someone else’s strategy. Although you should study the best practices, you cannot give control to others expecting to win.
If you are an independent thinker, you have already won half of the battle. Next, make a decision based on risk and reward. How much can you lose? What’s the potential upside?
When traders minimized risk and reward, they could decide based on logic. Remember, market emotions create a distorted value of bitcoin.
Lastly, use your knowledge to find patterns. If bitcoin is going to crash in 2020, you could find part of the answer in its past performance. Why did bitcoin fall in January 2018? How did it get back up? When did it start?
Of course, the past doesn’t predict the future. But we can study it to make better questions and improve our buy-and-sell strategy.
After all, trading is about working on the things we control and adapt to the events. That’s how long-term traders succeed in their careers.