Marcus Marion, CMA™ There was always an apparent interest in financial instruments, more so for economic growth than simple curiosity. Throughout history, individuals and organizations have used the financial market and the forces within it to enhance their overall economic and social capital.
In the 21st century, with the boom of technological advancements and vivid incorporation within the financial market, several new avenues have opened for people who want to invest their money for rapid and prolonged growth. And precisely in that technological and economic arena, cryptocurrency’s rapid rise has occurred.
Let us take this opportunity to discuss the functionality of cryptocurrencies and answer pertinent questions like, “When is the best time to sell cryptocurrency?”
What are the factors that make Cryptocurrency so popular?
When cryptocurrency first burst onto the scene and created huge wavelengths in the financial markets, mainly through social media, there was skepticism among people.
What was the technology’s viability? How did it operate? What were the governmental regulations involved? What is cryptocurrency buy sell signals? These were some of the questions that persisted among a curious user base. Ideally, many aspects made crypto so interesting.
1. Decentralized
Cryptocurrencies are widely considered as independent currencies. They lack a centralized unit, let’s say, an institution like a bank, to monitor the transactions.
It functions as a digital wallet where the data of any transaction is available to only the people participating in the transaction.
2. Virtual
The next aspect that made the instrument stand apart was the unambiguous virtual presence it garnered.
Every transaction happened between a peer-to-peer network without a paper trail. In short, the whole process depended on a digital network!
3. Global user base
Cryptocurrency institutes worldwide connectivity and userbase; there are no two ways. It provides the user with the capability to initiate and manage transactions throughout the world.
Additionally, as a user, you don’t have to worry about the financial red tape associated with governmental regulations and strict laws like taxation, currency conversion, or surcharge.
4. IdentificationAs it is often said, innovation is the key to success. Since cryptocurrency mining is a constant affair, new tokens are regularly introduced.
Cryptocurrencies provide users with anonymity that’s usually non-existent among other financial instruments.
Since the technology functions within an open network, your identity remains disclosed without being regulated by any financial agency.
However, this aspect has been thoroughly scrutinized because it gives anti-social elements the license to transact currency for nefarious purposes.
5. Inflation immunization
Crypto is independent, unlike conventional modes of transactions and financial instruments that are hugely vulnerable to the volatility of the financial markets and constantly fluctuate due to inflation and deflations.
The lack of a central unit gives it an authority that other transactions don’t possess.
How to determine the best time to buy or sell crypto?
Buying Cryptocurrencies
1. Understand the procedure
It’s a steadfast understanding that to invest in a specific technology, you must appropriately understand it first. Without proper knowledge, there’s a high chance that you’ll stumble and make grave errors. Investing in crypto is no different.
Since it’s a new market, many opinions will be available on enhancing your resources and making the most of every opportunity.
A crucial requirement for becoming a successful Bitcoin investor is a solid understanding of technology. Knowing how cryptocurrency and blockchain work inside and out can help you decide where to invest and how much money is needed to sustain it.
2. Have patience
You’ll better understand how the system operates if you’ve done enough research and immersed yourself in other crypto enthusiasts’ businesses.
You’ll feel more tempted to invest after doing so. Specific cryptocurrencies’ popularity and trendiness can drastically shift over time and are often entirely unexpected. Therefore, choosing the right assets requires creativity.
Always exercise patience. Since cryptocurrencies tend to follow market trends, predicting which business will make the most gains or suffer the most considerable losses can be challenging.
Bitcoin appears to be performing well right now, which explains its unusually high level of investments.
The digital currency market has unpredictable swings, typically brought on by exchange hacks, fraud, and price manipulation.
3. Keep it diversified
Any seasoned investor will tell you that diversification is the key to success in the financial market, and the same logic applies to crypto. If you’re just beginning in the crypto business, avoid putting all your eggs in one basket.
Many types of cryptos are available for you, so try to review the market trends and check which one provides you with the best options. The key to a diversified portfolio includes the following factors:
- Utilize various blockchain networks
- Investment in crypto-fused stocks
- Rebalance regularly
- Look into different areas of the market.
4. Utilize all resources
You will have a wealth of technological and financial materials to aid in your decision-making regarding the crypto market. Given the interconnectedness of digital platforms, social media may be your critical resource. You can also use these resources to your advantage
- Website forums
- Discussion boards
Additionally, controlling the project will be much easier if you approach the entire process like a professional corporation.
The same ups and downs that any business venture experiences can also be seen while investing in cryptocurrencies. It’s also a good idea to keep a thorough record of your overall investment so that you may add up the numbers later.
4. Avoid a unit basis
While purchasing any cryptocurrency, the focus should always be on the numerous functionalities a specific crypto provides rather than any unit or number.
This way, you can be more versatile with your investment and utilize decentralization more effectively.
Additionally, you can study different cryptos individually and decide on the one you want to invest in.
Restricting yourself to sheer numbers and units drastically limits your options and hinders your potential to earn more through technology.
Selling Cryptocurrency
There is no best time of day to sell cryptocurrency; it’s an overall process. Having the proper insight to understand and decide when to sell crypto is crucial when an investor is operating in the market.
Like traditional markets, bear and bull concepts also apply to cryptocurrency. Hence, you should know when to sell the instrument and not allow it to become stagnant.
You need to pay close attention to the market swings as they significantly impact the price of your currency. There is a general tendency among investors to hold onto their currency for a long time.
However, you should focus on the market’s current scenario to decide on the market. We’ll discuss some of the other selling factors below.
1. Lack of progress
The key to identifying the right time to sell your crypto is understanding the progress of your asset. Say you purchased a cryptocurrency with a lot of potential and resale value. But over time, the price of the tender has become stagnant and burdens your portfolio.
Before the drop in price of the token becomes more apparent, it’s simply better to sell it off.
This way, you can create space for other tokens in your asset bubble and allow room for continuous growth.
2. Relocation of funds
Not always do you need to make a sale of your crypto tender because of asset stagnancy. You can opt for a sale because you may want to relocate your assets to much better and more profitable waters.
Opting to relocate your funds to a more suitable business has long been a successful practice that allows users to cut their losses and cash in when they come across a better investment opportunity.
3. Prevention of Losses
One of the most crucial aspects of investing in the financial market is the possibility of your assets incurring losses, and cryptocurrency is no different.
Certain assets and tokens have the option of becoming non-functional. As such, it becomes essential to discard them when the requirement arises.
Only 1% of your total assets should be risked when investing because if your investment is low, the impact of losses will also be marginal. With cryptocurrency, one should always keep in place a margin of error.
4. Investment in new coins
As it is often said, innovation is the key to success. Since cryptocurrency mining is a constant affair, new tokens are regularly introduced.
As an investor just beginning, you must keep an eye out for new coins and buy them accordingly.
For the purchase of new coins, you will need to discard the old ones; ideally, you will choose the ones that will yield the lowest profits.
This manner of investment is crucial if you are looking to invest in new and innovative coins which you believe have a lot of potential for significant returns.
5. Sell when high
Unsurprisingly, conventional trading methods apply wholeheartedly to crypto investments. As you would try to profit from other financial instruments when the market is high, selling crypto tokens when there’s an upward swing is very common.
Similarly, you also earn profit by stalking your crypto on any future sale. This way, you can keep a steady flow of interest while holding onto your assets.
Additionally, this decision depends entirely on you. You can cash in or reallocate the funds or have them onto the token, increasing its value.
6. Negative publicity
The dependency that cryptocurrency has on the online sphere is highly prominent. Besides, daily updates cramp the crypto-related business news cycle.
As such, any negative news or rumor can spook the market.
The situation can become so volatile that their stocks fall, even if a famous influencer or personality derides a crypto company on social media.
Remembering this, you must look out for such negative trends and pull out your assets when negative news breaks out.
Summary
The crypto market has had sharp growth and shows great promise. Although it may seem complex to some, it may pay you big dividends once you understand the industry.
If you’re serious about becoming a successful cryptocurrency investor, learn how the process works. Once you know when to sell your assets, you stop incurring losses and gain profits.
