Correction in the cryptocurrency market: a personal insider's perspective

Correction... Damn, how much nerve and money I lost not understanding this simple phenomenon! Every time my favorite coins started to fall after a strong rise, I panicked and sold everything for cheap. And a week later the price would go up again. A classic!

What is a correction really?

Correction is when large players push small traders out of the market, creating a temporary price drop. Usually, this is a 10-30% decline after a good rise. They take your coins at a low price to sell them later at a higher price. And there is no "market recovery" here — pure manipulation!

While newcomers panic and sell, professionals quietly buy everything at reduced prices. I have found myself on the other side of the barricades too often...

How to recognize a correction and not go crazy

Technical analysis certainly helps, but not always. RSI above 70? Yes, often this is a sign of overheating, but how many times have I seen the price continue to rise despite all the "overbought" indicators!

The truth is that these large trading platforms intentionally create volatility to collect liquidations from stop-losses. They can clearly see where your stops are and know how far to drop the price.

Examples of corrections from my practice

1. January 2021, bitcoin

I remember this drop from $42,000 to $30,000 perfectly. Sold almost everything at the bottom! And then watched as BTC soared to $60,000. Classic "smart" trading.

2. May 2021, Ethereum

When ETH crashed from $4,300 to $2,100, many crypto experts were shouting about a bear market. I believed them and didn't buy at the bottom. What a shame.

3. Summer 2023, altcoins

By then I was already smarter and held my positions despite the correction of 20-25%. And you know what? It worked! By September, I came out with a good profit.

Reasons for corrections — a cynical view

• "Profit Taking" — this is actually just a manipulation by large players who first drive up the price and then crash it to buy cheaper.
• "Regulatory news" — a convenient excuse for masking market manipulations
• "Economic climate" — cryptocurrencies have long decoupled from traditional markets, but this myth is still used as an explanation.

My strategy for using corrections

1. Buying on a dip — the most effective strategy! I always keep 30% of my funds in stablecoins to buy during these "sales".

2. Support Levels — I don't believe in the magic of lines, but many traders use them, so they often work like a self-fulfilling prophecy.

3. Avoiding Panic — the most difficult thing! When everyone is panicking and your portfolio loses 20% of its value in a day, it's very hard not to succumb to the general mood.

Remember: when your taxi driver starts talking about crypto — it's time to sell. And when everyone around is shouting about the end of the crypto world — it's the perfect time to buy!

Never trade on margin, keep stop-losses, and don't believe those who promise you 100% profit in a week. And yes, this is not financial advice — I am just sharing my bitter experience!