How to deal with a major crypto crash? Prepare well mentally with investing in Bitcoin

A crash, be it a stock or a cryptocurrency, is a time of the most stress and anxiety for many people. No one wants to lose profits that have accumulated over a long period of time.
But the reality is that crashes are an important part of investing. Primexbt will help you better understand this issue.
Life always has two opposites, there are day and night, summer and winter, so in the market there will also be booms and busts.


The truth is that a lot of people are dreading a major bearish event and going into crypto winter like 2017. This is why it’s better to be always ready and prepared in such a way. best possible if this event happens.
Have you ever stopped and wondered what are the likely reasons for this bull run to come to an end and BTC to plummet? Since they are such an important part of investing, the more we learn about them the better.

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2 Potential events causing the price to plummet
The first catalyst that could cause a crash is regulation.
Currently, regulators have not yet agreed on whether cryptocurrencies are commodities or currencies or possessions so they often make decisions that make it difficult for the development of crypto.
The US government also recently intends to impose regulations on stablecoin issuers, who consider stablecoins to be a cause of financial risk and therefore need to be closely monitored.
Some regulatory time-bombs could explode at any moment, which could certainly drive the market down.
The second catalyst is the stock market crash.
When stock prices are at a crazy high, the Buffett Indicator by GDP is flashing warning signs that it has hit an all-time high.
And there will always be unexpected events that can cause this indicator to be pulled down more reasonably.
Like things that have happened before: suddenly covid appeared, China suddenly shut down Bitcoin mining companies or most recently, the sudden collapse of real estate giant Evergrande has had an impact. affect the global market.
A major crash between now and Christmas is entirely possible. We always have to prepare as best we can.

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How to prepare for a crash?
The easiest thing you can do to help reduce your risk is not to allocate a lot of assets to cryptocurrencies, especially during the late cycle.
Remember, cryptocurrencies are classified as a high-risk asset class. Towards the end of the cycle, the greater the risk associated with volatility, BTC can drop so quickly that you panic and sell at a loss at this point.
So based on your circumstances, don’t use excessive leverage. Invest only the amount you can afford to lose, and this amount is different for everyone.
Always want to make sure you are investing, not gambling.
Another thing that helps reduce risk is to break it down into three main phases – Time to Accumulate, Time to Hold, and Time to Sell.
When the market crashes more than 50%, we enter a good time to accumulate. You will notice this is when most people are panicking and selling their crypto for cheap.
Then we move on to phase two, which is the time to hold, which goes on until the market recovers and starts to set new highs.
Next, the market begins to set new highs, at which point you choose the right time to take profits.
And third, you can reduce your risk by only investing in large-cap assets.
Top coins like Bitcoin and Ethereum are like the Apple and Microsoft of the crypto world. And any coins that fall below the top 20, they are like small cap stocks, micro cap stocks and penny stocks. So they come with more risks.
This is not investment advice. This is just a way to help reduce risk and deal with any volatility in the cryptocurrency market.

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Summary
In fact, whether we like it or not, a crash is a fundamental part of investing. So it’s better to acknowledge this, discuss frequent incidents, and find ways you can prepare for, and even profit from, incidents.
Crashes often offer the best investment opportunities you’ll ever have.
Now no one knows what will cause the next big crash. It could come from regulation, a stock market crash, or some other black swan event.
So make sure not to allocate too many assets to crypto, invest only with your idle capital, reduce risk by buying after the crash event and take profits when the market establishes new high.
Selling in a panic is probably the worst thing you should ever do.

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