For traditional traders, they win because they can predict the rise and fall on the chart. Sometimes, big institutional investors can manipulate the chart. As a result, most of individual investors lose the game.
High volatility in cryptocurrency is not a bad thing depends on how you see it. Bitcoin's price skyrockets and then nosedives after a few hours. But what is it for us? The fact that we get dizzy looking at the chart is a good thing because volatility is necessary and inevitable for growth. It is also an opportunity for traders for making profits short-term. Crypto never ever sleeps in its early stage and it is almost impossible when to predict its movement on the graph because it lacks the economic indicators that stock market has. But isn't it a good thing? It levels the playing ground for all investors.
I have observed factors though that affects the price of crypto:
1. watch out for the news: about Government Regulation and Media influence. Cryptocurrency is very sensitive on this. Just look at the news about South Korea threatening to close all exchanges. Add the news about China. Both news caused the prices to nosedive.
solution? AVOID FUD. AT ALL COST. Watch out for news developments in Asia.
2. Extent of acceptance for the coin. What's mainstream and what's not? The more mainstream it is, the more volatile it is. You can also start analyzing the demand and supply of a coin. The limited supply and higher the demand, the higher the value. Focus on these coins first because they more likely to be affected with the news. Plus, consider the number of companies that are willing to take this certain cryptocurrency as a mode of payment. An increase acceptance of a coin will increase its value.
solution: Be up to date always.
3. Whales dumping to fiat currency. When the whales dump a large amount of their bitcoins, the value of bitcoin will dip.
Solution: No no no to panic selling.
Any inputs will be highly appreciated.
Topic: Crypto Never Sleeps: What to watch out for in trading (Read 106 times)
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