Most new crypto investors believe that 2018 was the worst year to enter crypto trading. The prices were constantly jumping up and down, bad news piled up with each passing week, and the situation generally looked pretty bad for months.
However, the most confusing part came after seeing that the more experienced investors still managing to make a profit. If you are wondering how is that possible with such high volatility — you’re in luck, as we are about to explain this strange phenomenon.
The first thing to note is that BTC price volatility can be a good thing, despite the fact that it is constantly criticized. Price swings can open up numerous opportunities to those who know how to exploit them. Those who do not are usually the ones who end up criticizing them.
By taking advantage of the price volatility of Bitcoin, investors can easily increase their holdings, often by a significant amount. It doesn’t matter if you bought the coins, mined them, or earned them in some other way. The fact remains that you want to make a profit out of them. More coins usually means larger profits once the price goes up and you sell them on. The same goes in reverse when the price gets low, you buy as many coins as you can, and then sit tight and wait for a price surge.
Follow up on crypto news
One of the best ways to predict how the price is going to behave is to consistently follow the news regarding Bitcoin. Different events can have a variety of consequences on the price. Quite recently, the US SEC refused to approve Bitcoin ETF request, which had negative consequences for the price. The similar method can be used for all other coins, with their prices often going up with new important partnerships, or down if some sort of scandal is unveiled.
Learn from your mistakes
Naturally, all crypto traders aim to make a profit by buying or selling digital currencies. Of course, they do not always get their wish. From time to time, you are bound to make a mistake, and experience losses. While inconvenient, you should remember these negative experiences. Do not panic, or try to forget that they happened. Realize your mistake, and don’t make it again. Being wrong is hard to admit, but learning to live with your mistakes and learn from them can be most beneficial.
Draw conclusions from the technical evaluation
A lot of investors, especially new ones, often make a mistake by going for the coins with the best prices at the moment. However, the smart investment goes much deeper than just the coin’s price. You need to understand all aspects of it, and you can do that through a thorough study of the coin. Learn its goals, study its technology, investigate the team behind it. Such details can often show which coin is worthy of investment, and which one is a bubble.
Follow these steps, do your due diligence, and you are bound to learn how to make a smart investment, when to buy, when to sell, and how to earn even when everyone else is losing.