Crypto Currencies Volatility, a Profitable Rollercoaster
Posted by Digital_Zone on June 12th, 2021
In 2010 we can observe that cryptocurrencies tend to move up and down even by 15% of value on a regular basis. Such changes of price are known as a volatility. But what if... this really is totally normal and sudden changes are among the characteristics of the cryptocurrencies allowing you to make a good profits?
First of all, the cryptocurrencies made it to the mainstream very recently, therefore all the news headlines regarding them and rumors are "hot ".After each and every statement of government officials about possibly regulating or banning the cryptocurrency market we observe huge price movements.
Secondly the type of cryptocurrencies is more such as for instance a "store of value" (like gold had been in the past) - many investors consider these as backup investment choice to stocks, physical assets like gold and fiat (traditional) currencies. The speed of transfer has as well an influence upon volatility of the cryptocurrency alert. With the fastest ones, the transfer takes even just couple of seconds (up to a minute), what makes them excellent asset for short term trading, if currently there's no good trend on other forms of assets.
What everyone should keep in mind - that speed goes as well for the lifespan trends on crypto alerts. While on regular markets trends might last months as well as years - here it takes place within even days or hours.
This leads us to the next point - although we are speaking of a market worth a huge selection of billions of US dollars, it is still really small amount when compared to daily trading volume comparing to traditional currency market or stocks. crypto trading signal Therefore a single investor making 100 million transaction on stock market won't cause huge price change, but on scale of crypto currency market this is a significant and noticeable transaction.
As crypto currencies are digital assets, they are at the mercy of technical and software updates of cryptocurrencies features or expanding blockchain collaboration, which can make it more appealing to the potential investors (like activation of SegWit basically caused value of Bitcoin to be doubled).
These elements combined are the reasons why we are observing such huge price changes in price of cryptocurrencies within couple of hours, days, weeks etc.
But answering the question from the very first paragraph - among the classic rules of crypto trading alerts is to get cheap, sell high - therefore having short but strong trends each day (instead of way weaker ones lasting weeks or months like on stocks) gives a whole lot more chances to create a decent profit if used properly.
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About the AuthorDigital_Zone
Joined: November 10th, 2020
Articles Posted: 547
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