Defining when is the best time to buy Bitcoin in general is difficult. This is because it is impossible to predict the future performance of any investment, and Bitcoin is especially volatile and unpredictable. So figuring out exactly when to buy and sell Bitcoin is essentially a guessing game, but Bitcoin experts can help us out a bit.
In simple terms, Bitcoin trading is the act of buying low and selling high. Unlike investment, which means keeping Bitcoin long-term, trading is concerned with trying to predict price movements by looking at the industry as a whole and price charts in particular.
Analyzing the Bitcoin experts
What methods exist to know when to buy or sell Bitcoin?
In order to know when to buy or sell Bitcoin there are two main methods that experts use to analyze the price of BTC: fundamental analysis and technical analysis. Success in trading takes a lot of time, money, and effort before you can be good at it.
The first thing we want to do before delving into the subject is to understand what BTC trading is, and how it differs from investing in Bitcoin.
When people invest in Bitcoin, it usually means that they are buying BTC in the long term. In other words, they believe the price will go up, regardless of the ups and downs that occur along the way. Normally, people invest in Bitcoin because they believe in the technology, ideology, or equipment behind the coin.
Investors buy BTC and hold it for a long time. Instead, traders buy and sell BTC in the short term, as long as they believe a profit can be made. Unlike investors, traders see Bitcoin as an instrument for profit. The volatility of BTC is a special attraction for these types of people.
Additionally, most traditional markets, such as stocks and raw materials, have an opening and closing time. With BTC, you can buy and sell whenever you want. Finally, Bitcoin’s relatively unregulated landscape makes it relatively easy to start trading – without the need for lengthy identity verification processes.
Popular trading methods according to Bitcoin experts
While all traders want the same thing, they practice different methods to get it. Some popular Bitcoin trading or trading methods include scalping, day trading and swing trading.
Bitcoin experts applying scalping try to make substantial profits in small price changes. It focuses on very short-term trading, and is based on the idea that making small profits repeatedly limits risks and creates advantages for traders.
For its part, daily trading involves carrying out multiple operations throughout the day, and trying to take advantage of short-term price movements. Day traders spend a lot of time looking at computer screens, and usually only shut down all their operations at the end of each day.
Meanwhile, the swing strategy takes advantage of the natural change in price cycles. Expert swing traders try to detect the start of a specific price move, and enter BTC trading then. They are held until the movement is extinguished, and they take the profit.
Unlike the previous two methods, swing traders try to see the big picture without constantly monitoring their computer screen. That is why it is more long-term.
Can experts predict Bitcoin’s price movement?
People follow two main methodologies when analyzing Bitcoin (or whatever else they want to trade, for that matter), fundamental analysis and technical analysis.
He fundamental analysis Try to predict the price of BTC by looking at the big picture. It assesses the Bitcoin industry, cryptocurrency news, technical developments, regulations around the world, and any other news or issues that may affect Bitcoin’s success.
This methodology analyzes the value of Bitcoin as a technology (regardless of the current price) and the relevant external forces, to determine what will happen to the price. For example, if China suddenly decides to ban BTC, this analysis will predict a likely price drop.
Then the technical analysis Try to predict price by studying market statistics, past price movements, and trade volumes. Also, try to identify patterns and trends in price, and based on them deduce what will happen to the price in the future.
So which methodology is better? The simple truth is that there are no guarantees for any type of trade. However, a healthy mix of both methodologies will probably give the best results.
Tips for Bitcoin trading
At this point, it is important to remember that BTC trading is risky business and mistakes cost money.
Some expert tips for how to buy and sell Bitcoin in the most appropriate way include don’t risk more than you can afford to lose. Furthermore, they recommend have a clear enough action plan to know when to enter or exit the market.
Another mistake you owe avoiding is giving in to fear or greed. These are two basic emotions that tend to control the actions of many Bitcoin traders.
Regardless of whether or not you made a successful exchange, there is always a lesson to be learned. No one manages to make only profitable exchanges, and no one gets to the point of making money without losing something along the way.
The important thing is not necessarily if you made money or not, but if you managed to get a new vision of how to trade better next time.
You can use tools such as the Fear and Greed index, Whale Alert, check the sales volumes on exchanges such as Binance, etc. You can also follow the reports we make from CryptoTrend on this matter. Experts rely heavily on information, as it is key to understanding the market. In this way, one day you can be one of the Bitcoin experts.