All my Altcoins are down! PANIC! Panic?
With the unparalleled success story of [cryptocurrency_widget type=”inline” symbol=”BTC~USD” template=”basic” color=”default”], chasing one all-time high are after the next, people start asking themselves why they actually trade altcoins. A relevant question, that is yet waiting for an answer. Many people start to – at least – worry, not to say panic, if they see red when looking at their portfolio of ALT coins. Yes, it can be frightening, but hey: You are trading a highly volatile/young market – you trade them for a reason: High risk, high rewards. The question why to trade alt coins when BTC is constantly growing is still open. Well, look at the picture percentage wise – if you refuse to sell in a loss, you can grasp double digit % growth rates in a few days, last example is is XLM for example, which shot up over 40%. How long do you wait for such a growth with BTC, where the price is already very high? The sharp eye can see some cycles repeating over and over again, thus look to take advantage of them:
- Scenario 1: Bitcoin goes up – altcoins bleed (throw your technical analysis out of the window)
- Scenario 2: Bitcoin gets dumped – altcoins bleed (Play waste paper basketball with your technical analysis)
- Scenario 3: Bitcoin runs sideways – altcoins perfom (Technical analysis works fine in the most cases)
We can see a 2:1 ratio, which makes a 33.33% chance of having altcoins perform well and keep up working with common technical analysis or fundamental events. The math is flawed though, as we need to include the total time of bitcoin within the three scenarios to put it into perspective. Almost the whole year was in bull run mode, with a few flash crashes inbetween and very small sideway movement cycles, so our % goes down the river even more. But try to keep things in perspective! No one likes red dildos – sure, though you have to keep in mind you are trading your alts against Bitcoin. A chart shows you a relation – how much increases for example XRP in relation to BTC.
If BTC gets stronger and stronger you will likely see red numbers with XRP, if there is nothing on the XRP side that strengthens its value in a similar % range than Bitcoin grows. So if you are panicking by seeing your altcoin portfolio, initially purchased for a total worth of 1 BTC, dropped to a value of only 0.8 BTC suddenly – check the $ value. If you are in a store and want to purchase a coffee – do you pay with BTC or $? Right! In real life, fiat is still king and it can be calming to keep things in perspective. On the other hand all coins are shitcoins, only to be traded to generate more Bitcoins, but things will stabilize one day, sooner or later.
The market goes up and down in an endless cycles. If you trade only high profile altcoins and no useless shitcoins like [cryptocurrency_widget type=”inline” symbol=”DODGE~BTC” template=”basic” color=”default”], your chances are good that your portfolio will recover nicely once BTC stabilizes. Imagine BTC runs for 13k, corrects down to 12k and stabilizes there for a while. Your altcoins recover slowly – what would that mean for the $ value of your portfolio? So don't be scared. Stay with good coins / tokens. Try to stop looking at the charts when BTC moons. In the past many people recommended to switch over to [cryptocurrency_widget type=”inline” symbol=”USDT~USD” template=”basic” color=”default”], but with the recent Tether scandal, you should reconsider that. If the panic overcomes you too hard, switch back to fiat as safe haven, take a break and buy back into BTC within a correction. That being said, we recommend just to bear with the pressure and keep on hodling. Everything will be good in the end, and if it's not good, it is not yet the end.