Cryptocurrency trading has gained widespread attention over the last few years. Many people have considered investing in cryptocurrency as a secondary way of increasing their income. However crypto trading is a complex process that requires people to make accurate decisions about their trading process. Traders and investors need to be aware of the trading strategies before investing in any type of cryptocurrency.
Considering the volatile and evolving nature of the crypto markets, users need to know the right time to buy and sell a cryptocurrency. Compared to the traditional stock markets, profits and losses happen during a short period in the crypto markets. To navigate through the complex crypto industry, users need to have a clear understanding and awareness of the market strategies.
When to buy a cryptocurrency?
A cryptocurrency can be traded 24 hours a day from around the world. People often think that profitable investment can only be achieved by purchasing cryptocurrency through a successful or known platform. However, it is also important to buy the cryptocurrency at the right time considering the unlimited trading of the cryptocurrencies during each minute.
Traders must know about the current economic climate of the market prices before purchasing a cryptocurrency and investing in it. As mentioned investors can buy cryptocurrencies any time of the day and this timing can greatly influence the entire trading process. Crypto experts have pointed out that the best time to buy cryptocurrency is during the morning hours before the New York Stock Exchange (NYSE) opens and the crypto value starts rising. Traders must pay close attention to price fluctuations as these vary in different cryptocurrencies.
Experts also suggest that cryptocurrency can be bought when the market hours are less busy as the prices will also be lower. The market is likely to be less active during early morning, late nights, or weekends. It is also best to invest in crypto towards the end of the month prices of the cryptocurrencies continue to trend after collapsing towards the end of the month.
For an effective investment process, traders can also make use of technical indicators to understand the economic conditions of the crypto markets. These indicators are essential and show how the prices of each cryptocurrency will be affected in the market. Nowadays there are many ways to employ for a successful and profitable investment. Let us look at some of the best indicators that help the trading process.
- Moving Averages: Moving averages can be considered as one of the most effective and simplest crypto indicators. This tool shows the average price of a cryptocurrency over a specific period and highlights the overall market trend. There are many types of moving averages but the most common ones used in crypto are simple and exponential moving averages.
- Relative Strength Index (RSI): RSI is a momentum indicator that measures the speed and change of price movements. It helps traders calculate the overall quality and health of a crypto asset.
- On-balance Volume: This type of technical indicator measures the buying and selling pressure by using the volume flow. It adds volume on up days and subtracts volume on down days. OBV is also helpful in identifying and confirming trend reversals.
When to sell a cryptocurrency?
Many investors are of the view that holding your crypto assets for a set period is one of the best ways to gain maximum profit from investing. While many others believe that selling their crypto assets at the right time brings them profitable gains. There will be certain situations during investing where one has to sell their crypto assets. However, it is important to note that selling your cryptocurrency at the right time is as crucial as buying cryptocurrency. Let us look at some of the situations where traders are prompted to sell their crypto assets.
- Lack of developmental progress: It is always best to sell your crypto assets when the project fails to progress or shows any developmental roadmap as promised in the beginning. It is unreasonable to stay on a project that fails to meet their desired goals.
- Experienced any substantial gains: If the crypto asset has doubled from its initial price, users can consider it as the right time to sell the crypto assets. This will help the users gain profits and allow them to relocate the assets to other successful projects.
- Reallocation of funds: Users can choose to reallocate their assets to a promising project without having any substantial losses or gains. Many traders tend to follow this approach to diversify and expand their crypto portfolio and increase their profits.
Conclusion
The right time to buy and sell crypto is a crucial decision that can influence the entire investing process. Users need to be aware of the technical aspects, risk management strategies, and the overall economic condition of the crypto market. Nowadays there are many strategies and measures available to lead successful crypto investments. However, considering the volatile nature of crypto markets, users should only invest what they can afford to lose.