If we talk of market capitalization, Bitcoin no doubt ranks no.1 among cryptocurrencies. We know the volumes that Bitcoin is traded in are huge. This is because small trading units of Bitcoin are usually not profitable thanks to the high cost and time of transactions involved. As a result, a Bitcoin sell off is also very huge, both in terms of volumes and financial figures, and can impact the market significantly.
Understand Bitcoin Sell-off
Let us start first with the sell-off. A sell-off means, very fast and continuous selling of some security, share, commodity, bond etc. with a motive to get rid of it in the shortest possible time, making the maximum possible benefit out of it, even if it sells below the cost price. The simple psyche during a sell-off is, something is better than nothing. Sell offs are usually a result of some negative market news, that can be true, or can be a rumor. And the effect of a sell-off is that the price of a particular commodity or stock, drops down abruptly.
Now let's talk about Bitcoin Sell off. Do you remember the situation around June 2018? It was about 10 days prior to the CBOE June futures contract expiration, and the price of Bitcoin fell by almost 18%. It avalanched into a major Bitcoin sell-off in 2018.
Another instance was Nov 2018, when the bears were dominating the bulls. In reaction the price of Bitcoin fell to about 4000 USD on the Kraken Crypto exchange, and there were rumors that it might further slash down to about 3500 USD. And this, as you can guess, led to a sell off for Bitcoin.
One of the most recent examples, is a sale order for Bitcoin on Bitstamp, for about 3645 BTC, which valued about 26.8 million USD, took place on 17th May 2019. The price then was about 7000 USD, which immediately sank down to about 6500 USD, and took about a week to recover. The reason was that such a large transaction invoked panic among smaller traders and ensued a sell off.
Make the Most of it
However, some traders, seasoned ones I must say, make huge profits during sell offs as well. They buy the BTC at this time, and then when the prices rise sufficiently high, they indulge into arbitrage. This can be a risky situation, because you never know how long it would take for the cryptocurrency to recover back after a sell off, and so you need to calculate all the associated costs of holding the cash in terms of BTC, for so long. Sometimes it takes years to recover from a sell off. Therefore, it is advisable to opt for consultation of reputed firms, before you decide to buy some BTC during a sell off, when everybody else is getting rid of their currency. If your consultancy can offer brokerage services as well, that would be great. One such figure that has started becoming eminent is executium.com.
The firm offers a unique set of services and adjusts your investment portfolio from cryptocurrency into various options like Bitcoin arbitrage, Bitcoin options trading, arbing and many more. Executium is a professional platform, where once you opt for their services, they will help you decide when it is time to generate revenue out of a sell off, and when it is time to sell during a sell off. Bitcoin sell-offs can be complicated to handle for an investor, and it is not a bad idea to go for the best consultation services around.