> Price corrections appear frequently in financial markets, which is inevitable, especially for crypto, where corrections are even more volatile. For example, in the past few days, the market has appeared to adjust the price from 24k -> 20k, making many people wonder: How long will this correction last? What should and shouldn’t be done in the meantime? In this article, we will discuss what a market correction is, what happens during a correction and what should be done to prepare for it? ## **I/ What is a Market Adjustment?** A Market Adjustment is a ≥ 10% decrease in the price of the financial markets and with BTC being the driving force. Price corrections can last for any length of time, from a few hours to a few days, even longer! Price corrections usually occur when the market has been growing for a long time or cannot break through the resistance levels leading to retest the support levels below depending on the strong or weak support that the market has. more deeply adjustable. ## **II/ How long can a correction last?** Price corrections can last for any length of time, from minutes and hours to months and years. In the end, what we care about is the price just correcting or falling more and more and when it rises again instead of how long the correction is. Since price corrections occur relatively infrequently, their duration tends to be relatively short. It’s not uncommon for crypto markets to experience fluctuations of 10% or more in a week (and sometimes just a day!). We won’t know for sure when the correction will end until the price hits a new high. However, it can be partly determined by a combination of technical analysis and psychoanalysis of the crowd. ## **III/ What should be done during the adjustment period?** **3.1. Absolutely do not “catch falling knives”** Many people have a “risky eating” mentality, often when they adjust, they will catch the bottom in the future and burn their accounts.** **Plunge to buy the bottom of the crypto market. in a correction seems like a good idea, but it is difficult to pinpoint the exact time of the market bounce because it is very possible that “today’s low is tomorrow’s top”. Moreover, buying at the bottom is not a sure way to make a profit! Even when buying at the exact bottom, there is no guarantee that the market will immediately recover and start rising again. Therefore, never try to rush in to catch the bottom of it like you would jump into the block of a moving ship. **3.2. Redefining your investment position** Are you a trader or a holder? If you are a trader, you will definitely have a lot of psychological influence, so to limit these effects, after having a certain amount of capital, everyone should use most of the capital to be a holder, just buy & sell. hold and spend a small part for short-term trading only. As a holder, every time the market falls, it is an opportunity to take a better position and increase asset value. **3.3. Avoid selling off **As mentioned above, once the psychology has been determined to be a holder, it should be avoided that it is a massive sell-off. Selling your coin during a bear market might seem reasonable, but it can make everyone lose money when the market bounces back because you’ve most likely sold at the bottom. Take a look at your investment portfolios, then cut your losses as planned, rather than panic selling. When the market corrects, it is important to stay calm and avoid making hasty decisions because of the emotions that the market brings. **3.4. Re-analyze your portfolio **During a market correction, take a moment to review your investments and gauge how they’ve performed? Look for any potential risks and reassess them. For example, if you have a portfolio that is heavily focused on altcoins, then you may be more susceptible to significant price drops than someone with a more diversified portfolio. Identifying your risks and reviewing your portfolio can help you make more informed decisions about your investments. **3.5. Consider diversifying **One way to reduce the impact of market corrections is to diversify your portfolio. Consider investing in different coins, such as BTC, ETH or altcoins. Diversification can help you spread your risk across different assets and minimize potential losses during market corrections. **3.6. Reassess loss tolerance **Market corrections can cause panic and fear. But this adjustment is inevitable, it must happen if the market wants to continue to grow sustainably. If you’re uncomfortable or fearful with each market correction, consider rebalancing your portfolio or downsizing your investments with high-risk projects. However, if your capital has a high risk tolerance and long-term investment horizon, you can comfortably hold your investments for the adjusted period. **3.7. Update Information **Always stay up to date with news and events happening as the market corrects, because it is possible that some news has a strong impact on the market and has a strong impact on the coins you hold. Also this can help us to make the right decisions and react to any changes in the market. For example, the recent USDC Fud depeg, you should adjust your portfolio accordingly. **3.8. Try to set aside a stablecoin reserve** Finally, the most important thing that most people do is *set aside a portion of cash or stablecoins to ensure flexible cash flow* and be prepared for unexpected situations. worst that can happen. If the market crashes forever, this is the cash flow that will save your life! This cash flow is a contingency fund and this should be enough to last you for at least 4-6 months. ## **IV/ What If The Market Keeps Falling?** Price drops in the crypto market are common and normal. If the market is collapsing, the best thing you can do is keep calm and observe the plan, what if it decreases, how about it, what if it drops? If you already have a plan to prepare for possible scenarios, then stick to that plan. If you don’t have a plan and find yourself becoming more susceptible to psychological pressure when prices are plummeting, it’s best to stop and take a look at yourself. And if you continue without a plan for different cases, next time you should learn from it. In short, when you lose, learn from it. **CONCLUSION: **Regulations are a natural and inevitable part of all financial markets. These adjustments are necessary to bring the valuation back in line with its long-term averages and to resume its uptrend. If you find yourself unprepared for the corrections, don’t panic. Because every train has a stop. Let’s wait for the recovery and review to be better prepared for the next wave!!
Source: Collector
