How Bitcoin Caused Crypto Prices To Crash

"China bans financial, payment institutions from cryptocurrency business" (Reuters)

"Bitcoin's obstacles mount amid China cryptocurrency warning" (Bloomberg)

"China cracks down on crypto business, saying 'speculative' trading 'seriously infringing' on financial order" (Forbes)

It's no surprise people would sell after seeing those headlines. That they were inaccurate soon became irrelevant. Panic set in, and the stampede to the exits was on.

The drop was further fueled by heavily leveraged traders getting liquidated as the Bitcoin price fell. According to CoinTelegraph$6.5 billion worth of Bitcoin positions was liquidated in just 24 hours.

That leaves us with one question: What now?

How Investors Should Trade Crypto Now

Though some crypto investors – especially new ones – are throwing in the towel now, that strategy will only succeed in locking in losses. As they say on crypto Twitter, now is the time to have "diamond hands" not "paper hands."

Investors new to cryptocurrency may not realize that crashes are not all that unusual. Drops of 30%, 50% and even 80% have happened several times in the brief decade that crypto has existed. Each time, crypto prices have bounced back to levels many times higher than where they were before the crash.

Also important to note is that the investment cases for Bitcoin and several other top cryptocurrencies such as Ethereum (ETH), Cardano (ADA), and Chainlink (LINK) haven't changed. The prices of these cryptos will rebound in the months ahead. It's very likely they will reach new all-time highs before the end of the year.

For those who don't own any crypto but wished they had bought some when prices were lower – well, now's your chance. Everything is 30% to 50% off, for a limited time only.

You never know how fast the rebound will be. It may take months for crypto prices to get back to previous levels. Or it could happen next week. If you really want exposure to crypto, this downturn is a terrific opportunity.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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