Why Crypto Crashes Could Be Good for Traders

Crypto Crashes Good for Traders

In the first week of September 2018, Goldman Sachs put a halt to its plans to launch a crypto trading desk. Following the announcement, the markets tumbled down. Most of the popular coins suffered double digit declines in a matter of 24 hours; including 12.4% for Bitcoin, 20.5% for Ethereum and 13.3% for Ripple on September 6, 2018. Fears also escalated with reports of huge Bitcoin holdings on the black-market platform called Silk Road.

The crypto market is highly volatile showing irregular momentum on a regular basis. It’s also susceptible to extreme highs and lows. One of the best ways to handle this is to have strategies that can be used for used for crypto trading during bearish climates.

HODL – With Crypto CFDs

“Hold On For Dear Life,” popularly known as HODL, makes sense during market crashes. Investors just buy cryptos and hold on to them for substantial periods of time, until the markets stabilise. This can be achieved with crypto CFDs, since they usually don’t have expiry dates. Traders can assume positions even in falling markets and close the contract whenever a good opportunity emerges. Shorting cryptos, which is usually termed as a highly risky method during bearish trends, can be done effectively through such derivatives. Blackwell Global offers 15 different cryptos for CFD trading.

The HODL strategy should, however, be used only for cryptos with a large market cap.

Should You Buy the Dip?

Buying the dip requires traders to time the market; a strategy that many experts consider challenging. There are significant returns if it can be achieved, but traders have to figure out when the market will bottom out. This strategy takes immense skill and experience, along with being well-versed in the use of technical indicators.

Trading crypto CFDs would obviously be a comparatively low-risk approach, since losses will be limited to a set price. Moreover, the value of the contract will increase if prices rise in future. The crypto markets have started on a recovery path in the third week of September. Bitcoin has been climbing steadily since September 18, increasing in value from $6,282 to reach $6,409 September 20, 2018, with a 0.77% increase in 24 hours.

However, the crypto markets have a tendency to surprise traders. So, there should not be an assumption that the markets will continue to rise.

Move Beyond Bitcoin?

Even in this ongoing bearish trend, some digital assets have managed to hold their ground. Traders have to find quality tokens that hold good future value. As of September 20, 2018, when coins like Ethereum are trading low, there are others, like EOS and Cardano, that have managed to grow by 2.02% and 4.08%, respectively, in the last 24 hours. It is important to learn as much as possible about the team behind a token. Include a token that you really want in your portfolio; something that will hold greater value with increased market participation.

On the other hand, experts suggest that traders should always buy something that they know about; scraping the bottom of the barrel is sometimes not favourable in bearish markets.

The crypto markets are highly volatile right now. With the pending decision regarding Bitcoin ETFs by the US SEC, due at the end of September 2018, the markets may again go upwards. Until then, panic trading should be avoided.


Trading leveraged products involves a high level of risk. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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