What is a landfill? – Quintripon

Dumping is an expression used in the cryptocurrency world when the price of a digital asset suddenly drops in value. It’s hard to be able to say what percentage we can talk about a landfill, but a figure that turns out to be around 10% is a good rough estimate.

Although cryptocurrency investors generally dislike landfills, they are unfortunately an integral part of the digital currency world. It is therefore important to master this concept well in order to prepare for it properly when it is hit hard.

What could be due to the dump?

There are several reasons that can cause a discharge. First of all, the crisis that could have the greatest impact on the markets is a major one, as was the case in mid-March 2020 at the beginning of the COVID-19 pandemic. During this event, the cryptocurrency dropped by 40% in one day.

Subsequently, the dump can also occur when a large country such as the United States or China wants to place restrictive regulations on crypto assets or prohibits, at least in part, certain crypto-related activities.

Sometimes dumps can also happen after a sudden pump (when cryptocurrencies quickly gain value) that no one expected. In this specific case, we’re talking instead of debugging.

Finally, some influencers can also cause big slumps, such as Elon Musk who announced in May 2021 that his company would not accept Bitcoin as payment for Tesla.

Should we rush to sell while unloading?

When you know that a dump is going to happen, it is obvious that you should sell your digital assets before their price drops sharply. However, it is impossible to predict in advance the appearance of the discharge and even a lower capacity.

Many models that aim to predict the future prices of cryptocurrencies are based on the average retracement, that is, prices will try to return to their previous value. Therefore, you have to be very careful and don’t break out of your crypto too quickly once you get rid of it because there is a good chance the price will go up.

However, there is an exception to this rule. This relates to proven and proven fraud cases. In this very specific case, it is a safe bet that the value of the digital currency will drop to zero in the fairly near future. So it is important that you succeed in giving up your cryptocurrency before it becomes worthless, even if it has already lost a significant part of its value.

Is this a good investment opportunity after a big drop in prices?

After unpacking, it is possible to find excellent investment opportunities, but you need to be extremely careful. As we saw above, if a digital asset loses its value because it is a scam, then you should obviously not invest in it.

On the other hand, if all the cryptocurrencies see their drawing melt like snow in the sun in a synchronous manner, there could be an interesting move to play. For example, after dropping 40% in mid-March 2020, the total market capitalization of crypto assets increased 10 times over the following year.

It is therefore very important to make a careful analysis of the reasons that may have caused the dumping of waste before deciding whether or not to invest. To do this, you need to learn more about various specialized sites (including ours) or social networks that provide encryption information (Discord, Twitter, Telegram, etc.).

Conclusion about discharge

All cryptocurrency investors will experience dumping at some point. Even if it is not always an easy time to live in, it is nevertheless important to know how to act properly during these periods to avoid amplifying your losses and to succeed in finding the rare situations where a good entry point for some cryptocurrencies can be found.

In the event that you do not know what to do while unpacking, it is important to do research to get the opinion of others and to gather the different opinions. This usually helps to better understand the state of the market and whether it is better to inject more money or do nothing or sell your digital assets.

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Nicholas

I discovered the world of cryptocurrency in January 2018. I arrived at the worst time to invest, I have not stopped training since then, and now I am sharing my knowledge in order to facilitate the adoption of cryptocurrencies.

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