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Article via Admiral Markets.com.

Even though currency trading has been practiced for quite some time now, the rise of currencies such as Bitcoin, Ethereum or Ripple gave it a complete facelift. Whoever had managed to get in during their heyday saw an incredible spike in profits in 2017, during a period known as the ‘Bitcoin bubble’. But how did they do it?

When it comes to exchange, having a bulletproof plan is the course of action all experts recommend. Testing out strategies beforehand in a safe and controlled environment is exactly what a demo Forex signup helps you achieve. But even that couldn’t have predicted what happened on the crypto market this winter.

About the Bloodbath

The prospect of strict governmental regulations concerning cryptocurrency in 2018 prompted the value of Bitcoin to drop below 12,000 dollars this Tuesday, after it had peaked at 14,300 dollars at the very beginning of the week. It’s worth noting at this point that it was going for as much as 20,000 dollars a pop before dropping suddenly just before Christmas.

The first batch of negative news concerning regulatory practices of BTC and other cryptos such as ETH or XRP (second and third in the charts) came from the top three Asian economic powerhouses, namely Japan, China and South Korea. With buyers from all over the world fearing that other global governments will quickly follow suit, values continued dropping like never before.

Then, on Wednesday morning, the true disaster happened in the blink of an eye. According to Ars Tehnica, Bitcoin officially dropped under the “psychologically significant level of 10,000 dollars”, ranking at just 9,700 dollars on the market. While this is still objectively a lot, you need to keep in mind that its price dropped by more than 10,000 dollars in one single month.

Thus, it’s easy to see that January has not been kind to this sector so far, with Ethereum and Ripple being dragged down right alongside Bitcoin in what is now known as a ‘cryptocurrency bloodbath’. And it won’t stop here. CoinDesk expects that the leading coin will drop even lower than the 8,000 dollars per unit mark, a grim prediction that will most likely come true.

An Important Lesson

Instead of being disheartened by this swift change in market conditions, investors and traders from all around the globe need to take it as an important lesson. The bubble created around Bitcoin was bound to pop at any minute, that’s for sure.

And while no one was expecting this steep of a downward spiral, it’s safe to assume that not many people stuck to the number one rule of successful forex: knowing when to exit a trade. everyone wanted to ride out the BTC wave of success for as long as financially possible, which is what ultimately led to major losses.

Even if you knew everything there is to know about Bitcoin, Ethereum, Ripple or whatever other one you might prefer, the financial sector is ultimately unpredictable. Forgetting that leads to devastating results, which is why the recent cryptocurrency bloodbath should teach us all a lesson in moderation and not letting emotions take over foreign exchange.

Conclusion

At the end of the day, it doesn’t matter if you were directly affected by this event or just watching from a safe distance. The lesson remains the same: never overstay your welcome, no matter how incredible a field seems to be doing. Bubbles always burst, and smart traders are those who know when to make the cleanest exit possible.

Still, having strong belief in your decisions is also an important trait. On top of that, everyone makes mistakes. Even today’s top players were put in such a situation once, so never give up on what you’re doing. Learn from your wrongs and you will emerge stronger than ever.