A market crash is a situation where the price of a crypto asset drops drastically in a short period of time. This can cause investors to panic and sell their assets at low prices. However, for wise investors, crypto market crashes can be a golden opportunity to profit. How?
This article will explain how you can take advantage of market crashes and liquidations to make a profit. Liquidation is the process by which a DeFi platform sells collateral used to borrow money at a discount, when the value of the collateral falls below a certain threshold. Using a platform like Kujira Orca, you can buy liquidated assets at a much lower price than the market price.
Keep reading to find out more about how to capitalize on crypto market crashes and liquidations in crypto investments.
What Is a Crypto Market Crash?
A crypto market crash is a phenomenon where the price of crypto assets experiences a sharp decline in a short period of time. It can be triggered by a variety of factors, such as negative news, strict regulations, hacker attacks, market manipulation, or bad sentiment. A crypto market crash can affect the entire crypto market, or just a certain portion of assets.
When the crypto market crash, many investors panicked and sold their assets cheaply, to avoid bigger losses. This can cause the price of crypto assets to fall even more, and create an adverse domino effect. However, for calm and savvy investors, crypto market crashes can be an opportunity to buy quality assets cheaply, and resell them at high prices when the market recovers.
What Is Liquidation in Crypto Investment?
Liquidation in crypto investments is the process by which a DeFi platform sells collateral used to borrow money at a discount, when the value of the collateral falls below a certain threshold. This is done to protect DeFi platforms from losses caused by unpaid loans.
A DeFi platform is a platform that allows you to borrow and lend money using crypto assets as collateral. For example, you can borrow USDT by using ETH as collateral, or vice versa. Using a DeFi platform, you can earn interest on your loan, or use your loan to invest in other crypto assets.
However, there is a risk associated with DeFi platforms, namely liquidation. When the price of crypto assets drops drastically, the value of the collateral you use to borrow money also falls. If the value of your collateral falls below a certain threshold, called the liquidation ratio, the DeFi platform will sell some or all of your collateral at a discount, in order to repay your loan. This may cause you to lose some or all of your collateral.
How to Take Advantage of Crypto Market Crashes and Liquidations?
Although liquidation can be detrimental to the borrower, liquidation can be profitable for the buyer. When DeFi platforms sell liquidated collateral at a discount, you can buy those assets at a much lower price than the market price. Thus, you can profit from the price difference, or keep those assets for the long term.
One platform that allows you to take advantage of liquidation is Kujira Orca. Kujira Orca is a platform that facilitates decentralized bidding on liquidated assets. Using Kujira Orca, you can purchase assets such as bETH or bLUNA at significantly discounted prices, in the following ways:
Select Assets and Determine Discounts
You can select the asset you want to buy (such as bETH or bLUNA) and specify the discount percentage you want from the market price. For example, you can choose to buy bETH at a 10% discount from the market price.
Place Offer
After determining the discount, you can place your offer through the Kujira Orca platform. You can specify the amount of money you want to use to buy liquidated assets. For example, you can place an offer of 100 USDT to buy bETH at a 10% discount.
Activate Offer
Once your offer is filled, you can activate it and wait for your offer to be filled. Your bid will be filled proportionally and evenly, along with other bidders who have the same or lower discount. For example, if there are 1000 bETH liquidated at a price of 2000 USDT, and there are 10 bidders who have a 10% discount, then each bidder will get 100 bETH at a price of 1800 USDT.
Withdraw Assets
Once your offer is filled, you can withdraw your purchased assets to your wallet by paying the required withdrawal fee. You can keep those assets for the long term, or sell them back at a high price when the market recovers.
That's how to take advantage of market crashes and liquidations that occur in the crypto market. That way, traders can take opportunities to make profits. Hope it is useful!
How to Buy Crypto on Bittime
You can buy and sell crypto assets in an easy and secure way through Bittime. Bittime is one of the best crypto applications in Indonesia that has been officially registered by Bappebti.
To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. In addition, also make sure that you have enough balance by depositing some funds into the wallet. For your information, the minimum asset purchase at Bittime is Rp10,000. After that, then you can make a crypto asset purchase in the application.
Monitor the price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
What Are Market Makers and Market Takers?
DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to sell and buy any crypto asset. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices may change significantly from time to time and Bittime is not responsible for fluctuations in crypto asset exchange rates.
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