How to survive Bitcoin´s panic crash and subsequent crisis!

in #bitcoin7 years ago (edited)

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So, as you probably know by now, Bitcoin´s hardfork failed. You can read all about it in this article: https://cointelegraph.com/news/segwit2x-is-dead-long-live-bitcoin-price-hits-all-time-high-as-hard-fork-canceled, and also in this excellent good-karma post: https://steemit.com/bitcoin/@good-karma/hardfork-failed .

What I´m here to discuss is what´s happens next, specially these few weeks. I won´t do a technical analysis, there are people out there that to that better than I do, but technical analisis tend to be useless in times of market panic because the situation changes by the minute. So, we got basically a quarrel inside the bitcoin ranks, since BitPico has defected to bitcoin Cash, taking almost 30% of bitcoins hash power with it: https://cointelegraph.com/news/segwit-death-challenge-bitpico-vows-to-fork-as-bitcoincom-goes-100-bitcoin-cash .

Now is when bitcoin gains uncertainty in peoples eyes, and we are looking to either a bearish market(descending) in the near term, or to a horizontal market(high volatility, but without breaking record highs and lows). So what will most people do until bitcoins problems are fought out and calm down? They will look either for other investment opportunities and for safe harbors.

Safe Harbors:

  • Of course the biggest, safest harbor right now is STEEM. Steem´s tendency will be to rise during this crisis, but bear in mind that it usually doesn´t rise too much in a short timeframe, and that´s good because it has intrinsic value and won´t get pumped and dumped after the crisis. You can consider it a safe place for the weeks to come.

  • Another safe harbor is the pseudo fiat USDT, which in some exchanges like Poloniex can be purchased. It´s value is locked to the US dollar, so it is a place to weather out the storm. Some argue that they don´t actually back down every dollar with a fiat dollar, and others question their liquidity during a crisis, so I wouldn´t put a large sum into it. But for thousands of dollars, it is safe enough.

  • Bitcoin Cash(BCH) seems to be another safe harbor for this storm. It got hit with a flash panic crash during news of the fork cancellation/quarrel but it recovered its price in less than 5 hours. Personally, I don´t know if they are gonna be able to sustain the current valuation of around 600 usd after this crisis but since they got bitcoin name branding, some big mining companies behind it and solid bitcoin tech behind it, it is very probably. However, IS bitcoin´s little brother and has a WAY lower market cap. So I would check its price regularly for changes.

Investments:

Most altcoins will be on the rise during BTC´s troubled days, so how can I distinguish good investments?
Well, you know that good long term investments are coins that have good fundamentals, good protocol, good teams, but what I´m really looking for here are coins that DO HAVE intrinsic fundamental value, BUT also have a solid market cap AND are raising not only against BTC but also against US dollar and with high volumes coming in but NOT all at once(because they would be pumped and dumped over a period of time that is too short, I´m looking to coins that will probably hold their value during this week).

  • DASH: Solid team, good anonymous coin and monero´s (XMR) competitor has been rising since before the start of the crisis three days ago. It has gone up from 270 USD to 323 USD, and that´s a 20% rise!

  • ETHEREUM: It got hit with a flash crash with the news that news that an admin made a mistake that costed 300 millions while applying a patch, but now it seems to be on track with a steady raise. It has been climbing more than 10% over the past 2 days.

  • MONERO(XMR): It´s the star in this suspense movie. It´s raised more than 30% in the last days and as long as bitcoin remains troubled, it will continue its current path.

As always, beware that once bitcoin stabilizes and its price starts climbing again, these altcoins will lose valuation since investments will flock back to bitcoin. HOWEVER, if you missed your window to cash back and are left holding the bag, don´t panic, DASH, ETH, and XMR are all solid projects and good long term investments, they will rise again for sure.

NOW SOME IMPORTANT COMMON SENSE:

One critical piece of advice I can give you is: don´t fall for flash crashes people. Those are panic crashes and its nothing but a whale or group of whales causing a stampede to be able to buy back in cheap. If a coin like BCH(or BTC for that matter) was going to crash, it would do so painfully over the period of weeks or months. Stay vigilant and stay sharp, as long as the coin fundamentals remain ok, flash crashes are opportunities to buy, not to sell.

Also, sorry for the poor visual format of this article, it was written in a rush because I consider the information it cointains time critical and way more valuable than it´s dressing right now.

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Frankly, visual format doesn't matter much, its the content you have written which matters the most. I agree technical analysis are of no use when there is panic in the market. Personally, I will prefer to add NEO as the safe long term investment at the moment.

Indeed! My post however was geared towards traders who want to make money in the short term during the panic. Thanks for your input! :D

I am hoping everything comes down a bit so I can buy in lol. I started investing in late August of this year so evaluations of most coins are very high compared to beginning of the year. I highly doubt they will ever get back to that low but one could dream ;)

Lol, you need to remember is not the PRICE that gives you the profits, is the PERCENTAGE of the raise, but I see your point.

Yes so true. I want to see +100% days like what was in the beginning of the year. It is just that as price goes up those big percentage days do not occur as much. ;)

True, but other altcoins do jump a lot, and sometime in the next 5 years we will probably see a true succesor to bitcoin gain traction.

Thank you for this very informative post. I'm sticking with ethereum at the moment as I can see this flying soon. Resteemed!

Good choice!

Thanks, I hope so. Dash, litecoin, & steem are looking like good investments too.

I currently own a little bit of litecoin, and its a solid investment, however I believe it will have some trouble getting to my sell price of 80 in the near term(two weeks). It is however a good long term investment.

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