How can you stay ahead of the crypto market trends and invest at the right time?
The term “cryptocurrency” has become a household word as more Americans get involved. Research shows that more than one in ten Americans have traded cryptocurrency in the past year.
For those who haven’t, there’s one main reason: the research reveals that 62% of those yet to invest in crypto say they’ve avoided doing so because they need to understand it more.
But succeeding in the crypto market doesn’t have to be a mystery. On the contrary, you’ll be surprised that you can make considerable gains in crypto, even as an average investor.
Where to start? Lucky for you, we’ve created a guide explaining how to get ahead of crypto market trends and when you should invest.
Learn From Investing
Nothing can make you learn faster than first-hand experience. So while it’s essential to do as much research as you can in crypto, the best way to apply that research is to get some skin in the game.
Once you invest in crypto markets, it’s not just about theory anymore—your money is on the line, and you’ll be inclined to protect your investment. In addition, you’ll get a feel for how the markets move and how trends change quickly.
Of course, keep in mind that you should only invest an amount you’re comfortable losing. Crypto can be unpredictable, and you want to avoid risking funds that you’ll need shortly.
You have dozens of options if you choose to get involved, from cryptocurrency exchanges to Bitcoin ATMs. Other options include peer-to-peer crypto owners, exchange-traded funds, and grayscale funds.
Still not convinced that your own experience will be the most significant teacher?
Average Analyst Success Rate Is 48%
Yes, you read that right. 48.02 percent! The average analysts’ gained a return of only 0.16% in 2021. You have a fair chance of meeting and beating these odds.
This isn’t to say that you shouldn’t trust analysts or ignore the expertise of others. (In fact, later, we’ll touch on a few examples of when you should trust the knowledge of others).
But we are saying that you shouldn’t take the advice of an expert as gospel. Instead, after conducting research, don’t be afraid to try the market yourself and make your own decisions. Your chances are as good as any.
Emotional Trading
No matter how smart you are or how great a trader you may be, your emotions will play a role in your decisions. As a result, there will be times when you ask yourself, “Why did I sell those shares?” Learn more about how to navigate emotional investing best here.
How does this play into crypto?
Crypto is a highly volatile market and will continue to be so. People’s emotions will naturally run high in a constantly changing market.
Now let’s take a look at who’s involved in crypto. 16% of Americans have personally invested in, traded, or used cryptocurrency.
This number jumps to 31% of young adults between 18 and 29. And men are twice as likely as women to say they’ve used cryptocurrency.
Let’s look at the demographics in the US: the primary group of crypto traders in the United States are young men. Studies show that younger adults are more prone to impulsive decisions guided by emotion. And research shows that men, in particular, have more problems with impulse control than females.
Take all of this into account, and you have one emotionally-driven market. Of course, as an observer, it may be more difficult for you to gauge these emotions. But when you have a piece of the pie, you’ll feel the stress that fellow traders feel during a dip or the excitement during a high.
Once you’re trading crypto, you’ll slowly learn to regulate your emotions and make better decisions during market highs and lows- And this will keep you ahead.
Follow Influencers
Anyone following Dogecoin can agree that Elon Musk says almost anything he wants and gets away with it.
Take Musk’s tweets in the past, ranging from “Doge is the people’s crypto” to “SpaceX launching satellite Doge-1 to the moon next year—Mission paid for in Doge—1st crypto in space—1st meme in space to the mooooonnn!” A January tweet confirming that Tesla merchandise was buyable with Dogecoin sent the coin surging by 18% the following Friday.
And Musk doesn’t just have a positive impact on Dogecoin, either. Dogecoin tanked after Musk called it a “hustle” on SNL in May 2021. In fact, crypto (and other markets) often respond to what Musk says, both positively and negatively.
While many of Musk’s tweets may sometimes seem like a joke, the reality is far from a joke. The markets often respond to what he says.
As an investor, consider this a lesson: look at what influencers say. Being the first to know about a social media post or a collaboration between two large brands could be the difference between buying when the time is right and overbuying.
Follow Industry Developments
You’ll often hear people say that the crypto market is unpredictable. While this is usually true, you’ll find many opportunities to make gains on the market without taking a gamble.
Let’s take a look at how Ethereum’s doing.
Ethereum is one of the most popular cryptocurrencies, and it had a good year in 2021. But in 2022, Ethereum made monumental gains. That’s because, as you probably know, Ethereum 2.0 made an appearance.
Under the previous PoW model, miners verify transactions using computers that solve challenging computations. However, this process could be faster and more energy-intensive.
Now that Ethereum has moved to a PoS system, it can process up to 100,000 transactions per second, compared to the current 14 transactions per second, giving Ethereum a competitive edge. Not to mention, the greener PoS protocol is much more earth-friendly.
A change to PoS also makes it easier for Ethereum’s decentralized apps to grow. The Ethereum blockchain houses projects, including NFT marketplaces and decentralized finance. The new system serves more users even faster.
Ethereum is just one example of a crypto that has the power to disrupt the industry and generate huge returns for you. You just have to keep up.😉
Stay Updated
To make the most confident decisions possible, you must stay ahead of the masses. This means keeping tabs on the market and how it could affect your crypto portfolio.
Seems impossible, right? It’s actually not so much—with social media and the modern newsroom, you can instantly get crypto updates.
Below are a few must-have channels, from news sources to Twitter, that can help you make informed, timely investment decisions.
Check Out Reddit
Reddit is one of the most popular ways to gather crypto information, especially if you’re a younger investor. The platform has subreddits dedicated to numerous crypto categories.
Users will post everything from trading advice and set industry updates to ICOs. Some popular Reddit forums to follow include; /r/CryptoCurrency, /r/CryptoMarkets, and /r/CryptoCurrencyTrading. If you’re a beginner, /r/bitcionbeginners may be a good place to start.
Use Your Twitter
Twitter is, without a doubt, one of the best ways you can stay updated on the crypto world. The entire crypto community will have its opinions and the current state of the union on Twitter.
Here, you’ll find new listings, announcements, updates, predictions, and niche memes (because what would a crypto platform be without them)?
Big crypto projects and founders typically use Twitter actively. Using it, too, you won’t miss out on big announcements or profits.
Great people to follow on Twitter include Vitalik Buterin, Naval Ravikant, and Chris Burniske, to name a few.
Read The News
Staying up-to-date with fast-paced social media platforms can be a lot to take in. However, you can balance out the frenzy of social media with a crypto-based news outlet.
Popular outlets include Coinbase, Cointelegraph, and Decrypt. These websites are reputed and contain the most recent information with unbiased updates. However, remember that there is a lot of crypto data out there, and it’s always wise to cross-check information on different sites.
You’ll also want to consider traditional newspapers like the New York Times or the Wall Street Journal. More prominent publications will delve into other market trends that can affect crypto.
Try On-Chain Metrics
There are a few great websites out there that will show you the latest data and analytics from the blockchain. One such website is Glassnode, a gateway that lets you explore on-chain data and metrics. In addition, you can compare this data across many different blockchains.
You’ll be able to compare statistics and data points that show the number of new crypto addresses and the number of active addresses. You can also gain insight into the flow of cryptocurrencies from miners to trades.
Other tools include Lunar Crush and Blockchain.com. Both can give you insight into what’s happening in the market and what trends may be on the horizon.
Understand The Value Of Crypto Projects
There’s a lot of hype out there. However, in many cases, there will be valid data explaining the legitimacy of a crypto project. Behind all of the predictions and opinions, you can research to find the facts.
Seek this data out, and you’ll put yourself in a much better position. Remember, any project is only good as the problem it can solve. A crypto winner will have real-world utility.
You can find this information in a crypto project’s white paper. Every coin has a “whitepaper” where all the information about the project is stored. A white paper will discuss a project’s purpose and its technology.
Here are some questions you should ask yourself while looking at a crypto project’s white paper:
- What is the problem the project seems to solve?
- How are they solving it?
- Is the idea worth your money?
- Is the idea worth your time?
- What is the roadmap?
Reading the whitepaper of any crypto project will reveal any red flags. While whitepapers are technical, reading them will give you the most robust understanding of the strength of an investment in a crypto project.
Think In The Long-Term
Sometimes the best strategy is to be patient. Think of the phrase, “It’s not a loss until you sell.”
While this statement is only partially true, it does have some merit. For example, say the value of your assets has decreased since purchasing them—this is called unrealized losses. But these losses are only realized once sold for less than your purchase price.
Keep this in mind before deciding to sell your crypto. Bitcoin is an excellent example of this.
Over the years, Bitcoin has consistently trended upwards over the long term. For example, data from Coindesk shows that a coin of Bitcoin costing $426.84 on April 12, 2016, cost $59,822.90 for one coin on April 11, 2021. For those who aren’t fans of math, that’s an increase of 14,000%.
So how did all of those early Bitcoin buyers know when it was the right time to buy? The short answer is: many of them didn’t. They took a chance and waited.
Leveraging Crypto Market Trends
Whether or not you decide to start selling and buying cryptocurrency, staying ahead of the crypto market trends can turn a trade into a major success.
And you can use crypto for more than just trades. Byte Federal’s Bitcoin ATMs let you take control of your finances. With a $21,000 daily limit and instant verification, we’re more than banking—we’re the future of banking.
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