Bitcoin has become the world’s first decentralized digital currency. And then, there was the crash in 2017 when Bitcoin lost 80% of its value in about six months. Today, it is a popular online payment method and alternative means of tax payment for certain financial institutions and businesses. And yet, it is still being traded at alarming price volatility. Bitcoin has experienced one of the most volatile price tags in recent history, with swings from as little as $10 to more than $1,200 in one day. This makes understanding when to buy and sell Bitcoin difficult, especially if you are new to cryptocurrencies or unfamiliar with their unique characteristics. However, you can try out the following ways to lower your risk while moving toward becoming a more informed crypto investor.
Check the source
You do not have to trust the source behind Bitcoin news sources, especially if they are all centralized news sources. Numerous websites are writing about Bitcoin that you might want to check out, but one of the most popular ones to look into is a crypto superstar. Many of these websites are centralized and operated by only one entity, so it is essential to look into the authority of each website before making a purchase or investment.
Stay out of the dip
You do not always have to stay in the red, even in a bear market. If you find yourself in a position where you are losing money, it is essential to stay calm and not get too emotional about it. However, when it comes to crypto, the feeling that something big is happening right now is exhilarating and can produce significant moves in the right direction. But if you are investing in Bitcoin as a hobby or a financial investment for a small business, it is essential to remember that investing in cryptocurrencies is risky.
Do not buy during a wave.
Many investors get too excited when they see a significant rise in Bitcoin and buy more than they need to. This, in turn, causes the price to rise and then fall again during the next wave, which is a hazardous strategy. Generally speaking, waves in the price of an asset are caused by significant news events. When there is a lot of positive news about an asset, people buy that asset, and when there is a lot of negative news about an asset, people sell that asset. Unfortunately, this type of trading can easily cause you to lose a lot of money, as seen in the recent Bitcoin sell-off.
Know when to buy and sell
When is the best time to buy and sell Bitcoin? Several times throughout the year, you should consider purchasing and selling Bitcoin. In particular, you should buy and sell when the price is low and trying to go up, as well as during the middle of a bearish trend and a bull market. The best time to buy and sell is according to your risk appetite. If you are comfortable with medium-risk investing, you should wait until May, when there is a lot of uncertainty surrounding the British Brexit vote. For medium-higher risk investors, let’s wait until October when there is much uncertainty surrounding the U.S. midterm elections. For high-risk investors, wait until November when there is much uncertainty surrounding the French presidential election.
Stay Updated and Take Informed Decisions
No matter your financial situation, chances are you will benefit from the growth of the cryptocurrency industry. Understanding when to buy and sell may feel challenging, especially when beginning with a cryptocurrency. The best time to buy and sell is according to your risk appetite. The best way to protect yourself is to stay informed and follow various news sources to get informed before making any investments. If all the bitcoin information intrigues you, you must try investing in cryptocurrencies.
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