The market can sometimes be a finicky monster. Its ups and downs seem impossibly hard to predict. That has never been truer than with the cryptocurrency market. Coins experience a bust at any time. Ergo, it would be wise for any trader to know when the market signals that is time to sell. So put yourself comfortable, and read the following lines.
Bitcoin News Trader FREE Signup: Let’s Start Trading!
Scarcity = valuable
The right moment to sell your cryptocurrencies will depend on the kind of coin you have. If you hold Bitcoins (BTC), Litecoin (LTC), Peercoin (PPC), QuarkCoin (QRK), Namecoin (NMC) or even Ethereum (ETH), you need to keep in mind when you’re going to sell them. You also have to know how scarce they are at any given point. For example, only 21 million of Bitcoin will be created, and in the present day, there are more than 16 million circulating. That means that BTC is getting scarcer, and therefore its prone to increase in value. So if you are looking for a signal to sell, consider how rare is each currency. The less scarce, the higher the chance for the crypto coin to see a significant price drop.
Volatility is another word for opportunity
That said all crypto coins, even the mighty Bitcoin, has its ups and downs. Therefore, before the article carries on, please always keep your crypto portfolio diversified. That way you hedge the risk and avoid large losses.
Cryptocoin prices could be at the highest and drop unexpectedly, and that is what you want to maximise your gains. You have two options when using volatility as a market signal in your favour. The first option involves day trading. Prices during any given day tend to stay within a coin’s support and resistance bands. Looking at the bands will provide you with an idea of when the coin is about to hit the resistance, which means it time to sell.
The second option is to play the long game, which means buying coins and looking at the news for signals of market panic. Both methods guarantee a timely market exit.
Respect the game and plan
It’s important to have a trading strategy and recognise it at all cost. Put a stop loss whenever you are making an order, and define how much do you are you willing to lose. If you play the game right, the right moment to sell will be when you feel it’s the right. The textbook curve does not exist in real life. So you have to know which are the prices you are looking for. You just must have a strategy ready and be willing to take risks whenever you see the candlesticks starting to change to red or black consistently. Always make sure to do not by the hype and read the market signs if you want things to end well for your portfolio. Otherwise, you might become another casualty.