Many savvy investors that were privileged to have bought bitcoin when the price was still under $100 are now crypto millionaires and even billionaires now. Some of these people seemingly know what the majority of the population do not know when it comes to watching out for the price of cryptocurrencies. There are several factors determining whether a cryptocurrency will be the next hit or is just a pump and dump coin. Here are some of them below
It is always recommended to look out for the extremely cheap coins especially those ones that are still priced below $1. Although this does not always result in profit for the investor, it is a way of taking calculated risk as you know that the cryptomarket is still very volatile and nothing is guaranteed. However, this is a good option for the investor who is just starting and testing the water of cryptocurrency. It is also good for the investor on a budget that has just little to invest. By buying low, the investor will be able to diversity into other cheaper coins and increase his portfolio thereby spreading the risk associated with owning and investing in these digital coins.
This is a very important factor to consider when looking out for the next coin that will hit. Redditors may sing the song of a relatively unknown coin to high heavens such that the coin begins to appreciate in value. You must be conversants with news events especially those posted on twitters and reddit sub groups which most often than not drive the prices of these coins. The majority carries the vote; It is called the herd effect.
This is also of utmost importance in the sense that scarcity drives up price and the fact that when there is a looming scarcity or even the fear of it, price of coins also go up. Minable coins like bitcoin often have a supply limit. If peoples interests remain the same while supply tanks then prices automatically shoot up and that may be a sign that such a digital coin may soon be the next hit.
An increasing price and volume is what drives the momentum of any coin and therefore these indices have to be watched out for. When price and volume of a coin are both increasing, it shows investors have confidence in such a coin and that may portend a good sign for such a coin.
This last point is also of great importance because it determines the intrinsic value of a coin to a large extent. When a coin is to be adopted into the mainstream sector as seen with ripples XRP that appealed to the Central banks due to its underlying technology for settlement. It also caught the attention of most investors when western Union wanted to use the technology for its settlement. This made Ripple jump to more than $3 in value from its previous price of under a dollar.
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I invest time, energy and money in order to get these valuable contents I post daily on this blog. I try as much as possible to do my diligent research and use my understanding of the financial and cryptocurrency technology that I gathered for more than a decade now to harness these points. This is not to serve as a financial advice but rather my own honest and practical approach I have been using to trade the financial market as the Chief Executive Officer of Global Keycom Solutions, A global Exchange For buying and selling Cryptocurrencies. Upvote/follow me if you find the content useful to you and add a comment if you have any correction or contribution to make. Cheers!
