Just like most things in life, you must be mindful against fraud while investing in cryptocurrencies as well. In this post, we will take a look at the things you need to do to avoid fraud while investing in cryptocurrency. Let’s get started.
Protection Against Crypto Fraud
Don’t believe unrealistic profit promises
Many people can tell you about false promotions and promises of profit. They can introduce themselves as a person, group or company. You should not pay attention to false promises, and even those from your close circle who try to direct you with precise sentences, or at least you should act cautiously. Because there is no such thing as “certain” in the cryptocurrency exchange. Unexpected situations can also happen.
Of course, there are some methods through which someone whose business is “fraud” has developed. Although it is not possible to include each of them here, the methods used in crypto money scams, in general, are as follows.
- Promising a large amount of earnings and submitting a few images to prove it,
- Opening an account with high followers or establishing a telegram group to show that they dominate the market,
- Build trust by sending signals they receive from others for a certain period of time,
- Requesting a certain amount of BTC or another coin in exchange for signaling from users,
- Disappear when the results are bad.
In order not to lose your whole existence against these situations, do not pay attention to the profit promises of people you do not know.
Stay away from fake websites
Fake websites are one of the most used fraud tactics. Even if you are following the sound strategies of the experts, you may find yourself in the position of a victim when you unwittingly browse a website.
Websites designed to resemble legitimate and authentic start-ups are a very common fraud tactic. If there is no lock icon next to the URL bar and there is no “https” statement in the address of the site, it will be of great benefit to be cautious.
Even if the scam sites you visit are exactly the same as trusted sites, you may be directed to different platforms for your payments. For example, when you click on a seemingly safe link, the attackers may have created a fake URL that uses zeroes instead of the letter “o”. These platforms do not direct you to the site you are researching and investing in cryptocurrencies. Therefore, write the URL you wrote carefully and check it carefully after typing. People usually have patterns of doing anything, the way you trade will also make you a pattern trader.
Stay clear of fake mobile apps
One of the fraud moves in the use of crypto money is fake mobile applications. Even if the fake applications that scammers use to deceive investors are quickly found and removed, these fake applications affect the balance sheet a lot. According to the reported data, a considerable number of people have downloaded crypto money applications. Although Android users are the most affected by the scam, it is an important issue that everyone who invests should take into account.
In order to understand whether the applications belong to scammers, you can look for obvious errors in the application text or application name. Another way you can tell is if the brand contains an odd color or a faulty logo. Always carefully examine the applications you will download and decide to download accordingly, otherwise, you may be stepping into the trap of fraudsters.
Beware of Telegram Channels
You can receive a lot of messages, especially from international numbers. Since the groups you are a member of are open to the general public of Telegram, they can easily find you from here. Do not trust these scammers who say that you can make money on untrue, completely fraudulent websites, without doing any daily transactions. They say that even if they make your first payment, you have to transfer some more Bitcoin (BTC) on your second payment under the name of “delay penalty”. If you rely on them, you may lose your money.
What are Bull/Bear Markets?
The use of the concept of “trap” for both markets is the concept used for the periods in which prices are removed for a short time (bull trap) or prices are deliberately lowered (bear trap) by manipulating the markets. In financial markets (commodities, stocks, foreign exchange, gold-silver, cryptocurrencies) in certain periods, the prices are very high and almost all investment assets find buyers and sellers at higher prices than they do.
The name given to these periods is the bull market. On the contrary, the periods when purchases fall rapidly and prices fall to the lowest levels are called bear markets. A smart investor can earn both in a bear market and a bull market by doing fundamental analysis and technical analysis. However, the “trap zone” between them is the most risky place to stay away from.
What is a Bear Trap?
Manipulation and speculation are among the most common situations in the crypto money market or other financial markets. These types of situations are one of the biggest reasons for FOMO, especially for novice investors. Extreme price fluctuations cause panic selling and most novice investors lose money during this period. The situation where corrections in periods when price movements are dominated by an increase are perceived as a “bear market” is called a ” bear trap”. Generally, the most common mistake in this market is to quickly dispose of assets instead of picking up.
For investors who buy while in a bull market and have some cash on hand, the bear trap market is an opportunity. Because with the decrease in prices, the cash in hand is added and the rises that will come after this short-term bear trap will cause investors to earn more. However, for those who are novices in the market, the situation is quite the opposite, because they are in a hurry to dispose of their assets as soon as possible, and this causes them to make losses.
What is a Bear Formation?
In the bull market, as we mentioned above, purchases are high. The overall market is seen as “green”. Almost every investor in this market profits consciously or unconsciously. In the “Bearish” market, the situation is just the opposite. The sales are more dominant and the stops are placed more.
Both the bear market and the bull market are situations that can be encountered constantly in financial investments. When a smart investor comes across a bear market, he determines the support and resistance levels, sells from the right place without making any loss or minimizes the loss and waits in cash. Novice investors, who have just entered the market, want to remove their assets as soon as possible, and this causes them to lose a great deal.
What is a Bull Trap?
The opposite of the bear trap, the bull trap is the name given to the market that creates a convincing market but will soon pull prices back to the support point. When the market is red, that is, in a period when sales are dominant, sudden rises begin and investors start to invest again, believing that the market has improved.
Bull traps are false signals that indicate a bearish trend in an index or other asset by breaking the previous support level of cryptocurrencies. The general scenario experienced in this trap occurs when the prices break the support levels one after the other, and then it falls below the support levels it broke by eating a big dump. This is one of the situations in which novice investors suffer the most.
What is a Bull Formation?
Bull formations are a market that is formed by the continuous, gradual rise of the market. It gives confidence to the investor, and a bullish (bull market) with positive externalities begins to form. During this period, someone who has just entered the market and does not have any knowledge about crypto money or other investment tools can also win. However, in general, both in the bear market and the bull market, investors should not act on hearsay information without having knowledge of fundamental and technical analysis.
Bull/Bear Markets FAQ
1. How to understand a bull market?
The bull market is the period when interest in commodities, cryptocurrencies or other investment instruments begins to rise. It is the name given to the market where the purchases are increasing and the main trend is moving in the upward direction.
2. How to understand the bear market?
A “Bearish” bear market is the opposite of a bull market. Sales are more dominant, prices continue to move in a downward direction, contrary to trend prices.
3. How long does a bear market last?
How long the bear market will last may vary depending on the situation. It is known that it sometimes lasts for one week, sometimes for one month, sometimes for one year or several years.
4. How long does a bull market last?
How long the bull market lasts also depends on the situation. However, in general, 49 percent of the bull run starts from the date of the halving and lasts to the top of the market. Of course, it takes a lot of expertise to understand the top.