With the recent downward movement of Bitcoin and other cryptocurrencies, investors are divided; some think the bear market is here, following the cryptocurrency cycle, while others think it is just a trap and the market will rally again.
Where do you stand? Is the recent downtrend just a mere retracement? Or the beginning of the bear market?
The Bitcoin market is very volatile and there are small declines almost every now and then. It is not right to worry about such declines. For an investor, such declines are the best opportunity to buy. Because whenever the price of Bitcoin drops a lot, you can buy more Bitcoin with a lot less money. Due to which an investor is not willing to miss this opportunity of decline. Whenever an investor sees a decline in the market, he continues to buy more aggressively.
However, a decline in the market can be very bad for a trader. Because a trader invests in a short-term manner. A trader becomes very scared when he sees a very small decline in a trade, as a result of which he sells his holdings or investments in panic.
However, some smart people take advantage of this decline. For example, they buy during the decline and when the market goes up again, they sell their holdings, so that they can earn some money.