6 Things to Remember When the Crypto Market Is Volatile

When the market falls, it can feel more dramatic than it may actually be when viewed in a broader context. Price drops are often felt more strongly than price increases, and experiencing some uncertainty is a completely normal human reaction.

It can therefore be helpful to look at the long-term development to gain a more complete perspective. What happens in the market over hours and days can feel decisive. But it is often the development over weeks, months, and years that is most useful to focus on.

Also remember that price fluctuations do not necessarily mean that something is “broken,” but rather that they reflect changes in sentiment and expectations. The crypto market has historically been characterized by volatility, and although movements have generally become less dramatic as the market matures, they are still a natural part of how it functions. Days with large price changes will likely continue – also in the future.

In turbulent periods, many people feel pressure to make a quick decision, while also worrying about making a mistake. It is completely understandable to feel stressed.

In such situations, it is worth remembering that choosing to do nothing is also a legitimate option.

Many find it helpful to take some time to gain perspective. When the most intense days are over, the situation often becomes easier to assess. A bit of time and distance can provide better clarity and more calm to reflect on what you actually want to do.

If you are completely confident in your decision, there is nothing wrong with acting quickly. However, many find that slowing down and gaining an overview makes it easier to make good decisions. It can also make it easier to live with the decision you make.

When the market is volatile, news headlines quickly fill up with explanations. A statement, a report, or an event is often blamed for price movements.

In practice, the connection is more complex.

News can trigger price movements, but it is often the underlying trend that determines how the market reacts. News alone does not provide the full picture. Over time, it is the long-term trends that set the direction – not individual news stories.

Today’s headlines typically focus on what is happening here and now. Larger trends, on the other hand, reflect developments in society, technology, and the economy over time.

A long-term price trend can be positive even if the market declines in the short term – and vice versa. For example, a stock or a cryptocurrency may show rising prices over several years, while still experiencing both increases and declines in shorter periods.

NB! Remember that not all cryptocurrencies have a long-term upward price trend.

Large price changes in the market are rarely caused by a single factor. Often, several mechanisms are at work simultaneously.

When many investors try to trade at the same time, price movements can become amplified. The use of borrowed money can also make movements larger than they otherwise would have been, as some investors may be forced to sell. This can create a domino effect.

It can be compared to a movie theater that can normally be emptied calmly and efficiently. But if everyone tries to exit through the same door at once, chaos can arise.

Such situations do not necessarily mean that the long-term fundamentals have changed significantly – but rather that sentiment and reactions in the moment are reinforcing each other.

One of the most challenging aspects of turbulent periods is the lack of clear answers. When you do not know what will happen next, it can feel especially uncertain.

It can therefore be useful to distinguish between:

Has something happened that is significant enough to alter the long-term outlook?
Or is it mainly uncertainty and short-term expectations that are influencing the market?

Asking these questions does not provide a definitive answer. But it can help shift the focus from immediate anxiety to a more long-term perspective.

When the market fluctuates significantly, many choose not to do everything at once – whether they are buying or selling. This means they do not buy or sell their entire position at once, but instead do so gradually over a period of time.

By spreading trades over time, you can:

This approach is used by both experienced participants and ordinary investors. Trying to actively time the market by buying or selling everything at the perfect moment is difficult and often requires significant time, experience, and continuous monitoring.

Market turbulence and price fluctuations are a natural part of both crypto and other financial markets. Periods of large declines or strong price increases have happened before and will likely happen again.

Many find that with time and experience, they become less stressed and better at handling volatility. Patience and a long-term perspective can take you a long way.