Strategies for trading cryptocurrencies during a correction, explained

Strategies for trading cryptocurrencies during a correction, explained

A correction refers to a rapid decline in price, which traders can use to their advantage with the help of cryptocurrency trading bots.

Although the definition of a correction differs, it is most often used to describe a rapid decline in the price of an asset, typically at least 10% and up to 20%. If an asset falls more than that, the price decline is classified as a market decline.

Corrections are usually the result of a minor event, such as low trading volume or other technical factors. Therefore, they occur quite regularly and last for a few days, weeks and, in some cases, months. The term correction is then used, since the price usually returns to its expected value. However, the alternative can also be true. A correction can lead to a further decline, a bear market.

As most know, the cryptocurrency market is defined by its volatility, so it is normal for prices to rise and fall quite regularly.

In the year 2021 alone, the cryptocurrency market suffered. four market corrections and one other market event.

For this reason, analysts will also recommend market corrections as a great opportunity for investors to buy “on sale” assets.

The main concern here is The reason is that it can be difficult to determine when a correction may occur. For this reason, cryptocurrency trading bots can play a crucial role in helping traders determine when to buy and sell using signals and indicators and also not to miss out on that moment by being away from the market. the screen.