Cryptocurrency Binance – Benjamin Franklin famously said that there are two inevitabilities in life: taxes and death. In the modern world with the advent of cryptocurrencies, there is one that is more obvious than others: volatility.

Cryptocurrency prices fluctuate wildly. Sometimes the market goes up, sometimes it goes down, even in a matter of minutes. You can go to sleep and wake up to amazing price changes. Since Satoshi Nakamoto founded Bitcoin ten years ago, volatility has become a common feature in crypto markets.

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Bitcoin plays an important and leading role in the cryptocurrency community. MotherCoin has held the top spot by market cap since it first hit the scene and is worth a healthy portion of the entire crypto industry.

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As a result of this enduring dominance, when Bitcoin appreciates or depreciates, it has a ripple effect on other cryptocurrencies. Altcoins have seen their value fall or rise, sometimes even more than Bitcoin. Bitcoin’s market dominance is a constant catalyst for turbulence in the crypto industry.

For example, when Bitcoin recently experienced a sharp drop in price, the cryptocurrency market also corrected. After hitting an all-time high of $64,800 on April 14, 2021, Bitcoin is up more than 33% through May 18. In the process, the market lost more than 300 billion dollars.

Prior to this, Bitcoin had a significant bull run. The cryptocurrency rose from $3,800 in March 2020 to a peak in April 2021. After such a strong trend, many began to doubt the possibility of a market correction.

A market correction occurs when an asset loses a large portion of its value in a short period of time. This behavior re-adjusts the forces of supply and demand in the market. We call this price reversal a correction because it brings the price of the cryptocurrency back to its long-term trend from abnormal growth.

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Individual cryptocurrencies such as Bitcoin, ETH or BNB may be revised. Or the cryptocurrency market as a whole. Corrections are usually associated with traditional stocks and shares, but can also be applied to cryptocurrencies.

A market correction is usually a steady price decline of at least 10% from a digital asset’s peak. Although trading indicators are used to predict when a correction will occur, no one knows for sure what will trigger it. We cannot predict when they will begin, end, or how much value they will lose before they end. However, this may be due to recent market events.

The recent correction in the crypto market may be responsible for the sharp drop in the price of Bitcoin. After hitting an all-time high on April 14, bitcoin quickly lost 12% of its value in a three-day correction. As expected, a domino effect ensued, with traders and investors quickly selling their gold to avoid losses.

During this period, the total market value of global cryptocurrencies fell by 13% (about $300 billion). According to CoinMarketCap, the loss brought the market down from $2.2 trillion to less than $1.9 trillion.

Why Is The Cryptocurrency Market Down?

It is not clear what exactly caused the decline, although several factors may have contributed to the decline. One of the most cited reasons was a power outage in China’s Bitcoin mining facilities, which caused a significant drop in the network’s overall hash rate. The market is simply underestimating and may need a correction.

Many factors influence corrections, including technical factors, market dynamics and cycles, new news, regulatory and policy changes. Therefore, it is difficult to mention just one in any revision.

A crypto market correction is similar to a bull run, a long-term increase in the price of cryptocurrencies.

If a digital asset experiences a long-term appreciation in value, it may be overvalued. Ultimately, demand for the property weakens and supply increases, leading to a market correction.

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At this time, many traders and investors sell stocks and take profits. Sometimes news and other external factors can fuel a correction. An initial sale often causes other cryptocurrency shareholders to sell their shares, causing the price to drop even further. Repeating this pattern, the price will continue to decline until it reaches a strong resistance to selling pressure.

During a bull run, multiple corrections occur as supply and demand adjust to market expectations of cryptocurrencies. Bitcoin’s recent all-time high was $64,000 in April 2021. The currency lost eight percent of its value before resuming its bull run. Ethereum experienced a correction after reaching $1926 in February 2021.

A correction usually takes place after a recovery, and the market resumes a bullish movement after a short decline. However, if market corrections continue, they can lead to long-term declines known as bear markets. When the market is volatile, the price of cryptocurrencies can fall by more than 50%. Bitcoin hit an all-time high of $20,000 in December 2017, leading to several corrections and ending in a two-year bear market.

A 10% drop in the value of its own crypto portfolio worries some investors. If you are a short-term or forex day trader, a correction may seem risky to your position. Unless you’re a trading expert, it’s best to understand that corrections are likely to occur and make calculated decisions about trades and take-or-hold profits, rather than giving in to impulsive reactions.

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It’s easy to make rash decisions based on emotion, but you should avoid it. There are corrections in the crypto market, but they don’t always lead to bear markets. Instead of selling during price declines, some long-term cryptocurrency users choose to “auction” their crypto assets.

Protecting your cryptocurrency portfolio from the effects of market corrections is difficult, but not impossible. Since there is no telling when a correction will start, end, or turn into a bear market, it is not a bad idea to plan. It doesn’t have to be complicated, but it should prepare you for future market corrections. Here are a few ways to make the most of your crypto assets during a market correction:

First, you can choose to set a trailing stop or stop limit to deal with the price drop. These allow you to exit the market before your investment loses too much value. These market orders are triggered when the cryptocurrency reaches a predetermined price level. It is good practice to periodically monitor whether they are relevant to current market conditions.

Second, if you are a long-term cryptocurrency holder, you can invest your crypto assets in investment products and fund management tools to generate passive income like Earn. With Earn you can earn passive income in DeFi market in bitcoin, stablecoin, gold coin and even kid money.

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Another option is to amend your cryptocurrency holdings by converting them to fiat currencies. Once the settlement is complete, you can return your assets to the original cryptocurrency. Price alerts give you the best chance to prepare this strategy and execute it correctly. Note that this is not without risk, so do your own research before making a decision.

Generally speaking, a market correction is nothing to worry about. If you plan for them to happen, you won’t have to panic when repairs happen. By not being prepared, you are setting yourself up for failure.

Investments are hit or miss during market corrections. It could be a big mistake, and it could be the best decision you ever made. It depends on what happens after the repair.

Bitcoin’s all-time high in December 2017 has been followed by a bear market. Investing in this correction is wrong. Those who held for years or years before making a profit or sold their coins at a loss. Waiting too long for a market rebound can affect your emotional and mental health.

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At the same time, the correction provides investors with better buying opportunities. A popular term in crypto circles, “buying the dip” comes from taking advantage of a market correction by buying a coin at a relatively low price. If things go well, you can slowly build a high-value crypto compound in the future.

Investing in cryptocurrencies is subject to high market risk. Business is not responsible for your losses. The above opinions and statements should not be construed as financial advice. It has earned the title of the world’s largest cryptocurrency exchange by providing its customers with security, reliability, convenience and versatility.

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