Important Factors That Speculate the Rise and Fall of Coin Prices in the Cryptocurrency Market
Entering a highly volatile market that works on complex strategies can be naturally very overwhelming and difficult to follow. If you have no idea about trading and contain zero knowledge in the related field, it will be really difficult for you to make a wise business decision. Ideal strategies in such cases would be to consult a guide who might help you make wise business decisions in terms of investment. Once you are comfortable with trading on your own, follow a definite strategy and abide by the same.
If you are willing to own handsome amount of cryptocurrencies in your trading account, there are certain important factors that you need to follow in order to have profitable gains.
- 1. Find Relevant Exchanges to Continue Trading–
Believe it or not, there are plenty of cryptocurrency exchanges running across the world. Unlike the traditional stock exchanges, these exchanges portray different coin price for the same coin in separate exchanges. Find the best trustworthy exchange to start your trading. Learn the protocols followed by the website users to buy and sell successfully on the selected platform. Also, beware of the scam exchanges, which are prevalent in the system that commits fraud on a frequent basis.
- 2. Store Your Coins in a Secured Wallet-
Since the market is highly unregulated, there are hackers who are lurking into the systems and robbing people of their available coins. Some exchanges have incurred a huge loss due to the fraudulent scheme led by the hackers. However, exchanges do have an option of keeping the coins secure inside the wallet. But, options like cold storage wallet lets you store coins offline and secured, thus protecting your wallet from undetected fraud. These frauds happening in exchanges and in terms of coin often lead to dropping in the coin prices.
- Don’t Analyze Coins Only on the Basis of Coin Prices
When the prices of the altcoins go up, everyone is tempted to extract easy gains from the digital platform. Unfortunately, the traders who have just entered the trading business are unaware of the fact that price is not the main factor for formulating trading tactics. One must analyze the coin on the basis of the founding team members who have created the coin, what real-world problem is the coin solving, and which currency exchanges it is currently listed in. Once you understand the trading strategies, you will easily learn to play along with the market. Few coins are ideal for short-term gains and easy returns, while few coins should be traded for a longer duration to earn maximum returns.
- Enter the Market When It Is Bearish
In the month of December, the prices of the crypto coins shot up to the moons. BTC was traded at $20,000 at that time. The market was then in bullish phase. During the bullish phase, the traders should ideally sell off to earn maximum gains. Buying BTC worth of $20,000 is never recommended. After the bullish market run, the market turned bearish with most of the traders selling off their coins and ultimately leading to price drop. This is the ideal time to hold your coins or buy your ideal coins to incur heavy profits. Hence, it is ideal to plan your move before initiating cryptocurrency trade.
- Follow Top Cryptocurrency Traders-
There are a couple of cryptocurrency traders who do a proper technical analysis of every coin and give trade advice on the basis of that. Many new traders have benefited and learned a lot of tactics after following their advice. Research about the best crypto traders and analyze their trade advice to enjoy good returns.
With some research and knowledge, you are bound to succeed in taking successful trading decisions. When the market goes down, don’t sell immediately and become a panic seller. Instead, hold the coins and analyze the earning potential of each coin and formulate decisions accordingly.