In 2017, Apple co-founder Steve Wozniak received more than 2500% profit from the sale of his bitcoins at a rate of about $ 20,000. And all because a little over a year ago he managed to buy them for $ 700.
How to determine the “right” moment for purchasing cryptocurrency? What to focus on in order to understand whether the token will become cheaper or more expensive?
Here are the TOP 4 life hacks that will help you make profitable crypto purchases. Maybe, of course, not as profitable as those of Wozniak. Although … who knows! So, here are these tips:
The crypto market is highly responsive to fundamentals. For example, the news of a large investment in a particular crypto project may cause a sharp rise in the price of its token.
The growth driver is often the news about the release of a cryptocurrency on a large exchange or about the integration of a token into popular payment systems. Therefore, in order not to miss the opportunity for a profitable purchase, carefully follow the information background.
A price rollback is often followed by a rapid upward impulse. A striking example of this is the situation with bitcoin. In March 2020, the BTC rate fell to $ 3800.
Many traders then believed that this was the end of the era of cryptocurrencies, and rushed to get rid of their tokens. However, those who turned out to be more far-sighted and believed in the prospects of the crypto market bought Bitcoin “at the bottom”. It is not difficult to calculate how much profit they received by December, when the token price exceeded $ 22,000!
Important! Be careful: not every price cut is a bargaining signal. Be sure to take into account the market sentiment and use technical analysis, which will be discussed in the next tip.
Despite the fact that cryptocurrencies are more volatile and less prone to the formation of stable trends, technical analysis is quite applicable to them, as well as to classical market instruments.
A Bitcoin or Ether chart can be analyzed in the same way as, for example, a EUR / USD chart or Amazon stocks. Use support and resistance levels, price extremes, and head and shoulders or double bottom patterns to find accurate buy signals.
Important! Technical analysis works best on top cryptocurrencies, as the market picture is the most understandable for them.
Professional traders know one important secret: it is better to enter a purchase not at once, but in several transactions. Because even with the most careful analysis, there is no guarantee that the moment for the purchase is chosen correctly.
In order to minimize risks, it is better to divide the estimated investment volume into 3-4 parts and gradually add to a profitable position if the exchange rate really grows.
If the trend reverses downward, you will lose much less than on one major trade.
And, perhaps, the most important thing! It is worth trading cryptocurrencies only when you already have experience in trading. Therefore, if you are still new to the financial market, we recommend that you first undergo systemic training and start trading with simpler and more understandable assets – for example, with classic currency pairs.