It’s not a secret that cryptocurrency makes headlines these days. Everyone, from major investors to ordinary people are eager to purchase at least a small amount of digital assets.
However, since the first digital currency came to the world, it has proved its volatility.
What is the best decision: to buy crypto now or to wait? Read on to discover.
Analyze the current market situation
Before purchasing any cryptocurrency you need to know some useful tips.
Examine price charts
First of all, open any crypto exchange platform to discover the current market situation. Price charts serve to show the price of the pair you are eager to trade with.
You can examine exchange rate fluctuations and determine the best time to sell or buy digital currencies by observing the chart.
Secondly, it’s a good idea to plunge into technical analysis. To earn money, you must first acknowledge how market trading operates. You can do this by studying price chart patterns that represent price tendencies in the cryptocurrency market. The patterns could be indicators for your next steps, such as buying or selling crypto assets. Sure, to understand all of them and make a profit, you will most likely need to trade frequently.
Chart formations serve to analyze market conditions. On the chart, you can see patterns. A price pattern is defined as an identifiable configuration of market movements that can be recognized using a sequence of line graphs and/or curves. For example, a reversal pattern occurs when a price pattern indicates a change in trend direction; a continuation pattern appears when the situation holds in its current direction after a slight pause.
There are numerous types of chart patterns that traders use to forecast future price movements. The flags, head and shoulders, top and bottom, rising/falling wedge, triangles, pennants, price channel, and diamonds are all common chart formations.
Chart formations have varying possible outcomes because the price does not always progress as assumed when a formation occurs. Traders usually look for chart patterns and then see if the price remains in the pattern or falls down. Either of these scenarios gives multiple trade opportunities. Market participants should also be watchful, as sometimes they can observe false breakouts. A false breakout means that the price keeps moving out of a pattern, making people believe that the price is now moving by the breakout trajectory, but then rapidly modifies and returns to the chart formation.
Candlestick charts represent a type of technical chart that condenses information for numerous time periods into specific price bars. This renders them more convenient than traditional open-high, low-close bars or simple lines connecting closing price dots. Candlesticks conceive patterns that, when done, anticipate future price movements. This colorful technical instrument traces its roots in 18th-century Japan. Candlesticks gain depth with appropriate color coding.
Dragonfly Doji, Bullish Harami, Three Black Crows, and Evening Star are some of the candlestick patterns used to specify price fluctuations and momentum.
Nevertheless, it is crucial to highlight that many of the signals emitted by these candlestick patterns may not work properly in today’s digital realm.
As well, when you learn the instruments, adapt, and try various widespread techniques, you may try to create your own strategy. To buy and sell successfully, you should fully comprehend technical analysis, as well as how to read price charts and study patterns. Piece by piece, you will improve your skills, expertise, and jungle with various strategies to find the one that best suits your needs. Remember the situations when you took profit and always investigate what affected your loss. Consequently, in the long term, you could establish your own trading strategy based on a scenario or set of circumstances in which you benefit and minimize losses.
In any case, bear in mind that alterations in the cryptocurrency market are hard to predict. Thus, you can never be certain that your assumptions are correct 100 percent of the time. Even professionals make mistakes.
Choose a robust crypto exchange
To trade Ether (ETH), Bitcoin or any other virtual currency, we suggest you select a reliable cryptocurrency exchange. Here are some characteristics allowing you to select the right one:
- Easy-to-use Interface. Just like with CEX.IO, where one of the advantages is the convenience of a user-friendly website and mobile application, the interface ought to be entirely plausible and straightforward.
- Positive reviews. Analyze several feedbacks from people who have already purchased or sold cryptocurrency via the selected crypto platform.
- Security of your data. It’s indeed best to select an exchange that supports two-factor authentication and provides KYC. The exchange should possess all of the necessary security certificates, such as SSL and ICO.
If the cryptocurrency exchange matches the abovementioned features, you are likely to find the good one.
If your decision, for now, is to buy crypto, you may get interested in the Savings feature offered by some exchanges. Some digital currencies, like BTC, TKO or BUSD, allow you to gain extra money by just purchasing them and keeping them in your wallet. While using the function of Savings, you get some percent into your account on the value date.
Thus, you can kill two birds with one stone: buy crypto, keep it in your wallet, gain extra funds, and sell when the market conditions meet your demands.
Be in tune
Always keep up the pace and follow the news. It is important while buying or selling cryptocurrency because the opinion of influencers who own Bitcoin or altcoins concerning virtual currency may change market conditions as it happened with Elon Musk. After his Tweets concerning the possibility of buying Tesla cars for Bitcoin, the price of the leading cryptocurrency has risen drastically.
Nobody knows for certain when it is the best time to sell or buy digital currency. Prices are constantly fluctuating, so you must keep an eye on the chart, be aware of market conditions, and conduct some analysis to make a profit.