Panic Buying & Holding - Looking Back & Thinking Ahead
Just another day
Today was one of those days when you feel like the skies are falling and you have to just sell everything in order to buy back later on and save what can be saved. But then again this option is risky because well, nobody has a crystal ball, and therefore you may end up missing out and losing the opportunity to take profits, all because you just wanted to improve your position in your favourite crypto project and thus make profits. That's right, this process can be a headache.
This is pretty much what goes on in the minds of those panicking at the sight of such price swings, the vast majority of whom are relatively new to the crypto game and do not have trading experience. People tend to forget the past and only focus on the recent price history of the crypto project they are interested in, so a decrease of 10% is more than enough to make them panic sell and doubt, even if their preferred asset has grown by 500% in the last 2 years.
For some reason it has always been easier to focus on the negative things in life, so I can understand where the sentiment of uncertainty stems from, but I'm just here to say that it always pays to just zoom out and have a look at things on a smaller scale. If you look back and examine what has been going on in the cryptocurrency ecosystem since 2009, I believe you will be able to just laugh it all off and make fun of the red signs on your screen.
Of course I do realize that it is not so easy to remain calm and be a clear thinker when you are heavily invested in a project, but if you are a true believer in the blockchain technology and in for the long term, then it should be easier to not worry about the USD value of your holdings at the time being. If you can appreciate the blockchain technology and the ways in which it can change our lives for the better, USD values shouldn't matter at this point.
And that's because you should be in a position to think ahead and see that the cryptocurrency industry is here to stay and change the way we perform transactions on a global scale. Whether you are a whale or not, I think you can appreciate the opportunity to accumulate more at a discount.
But how do you react calmly to a day like this, when everybody is FUDing and panic selling? Easy, by looking at the charts on a log scale and zooming out so you can see the entire price history of the token that interests you. Let me elaborate on this by using two charts presenting the total market cap fluctuation over different time intervals and it should be clear enough.
However, the same cannot be said about the second image, which shows that the only way to take losses is by selling your tokens during the dips. Even though the data is presented on a linear scale, we can see an obvious trendline that could be utilized to describe the complex formula engraved in the chart. Now let's present the data on a log scale and see what we have.
Thank you for your attention
Alright guys, that's it for now. I sincerely hope you learned something new today. Thank you for taking the time to read those lines.
Just my two cents. This is by no means financial advice. Just sharing my personal views and experiences. Please do not take my word for your investment choices, and always do your own research.
Stay safe and have a good one, @lordneroo
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