The cryptocurrency market is one of the most profitable ventures you could invest in right now. However, the high volatility of cryptocurrencies can make it extremely risky for people inexperienced in the sphere.
You could always buy Litecoin and hold on to them until they appreciate in value. But what’s the fun in that? There are thousands of other cryptocurrencies out there, many of them outperforming the original crypto by a long margin in the short term.
If you were always interested in what you should look at when investing in a new cryptocurrency, you’ve come to the right place. In this article, we explain the reasons behind the crypto price fluctuations and we give out some tips on how you should find safe entries in the market. Let’s dive in.
Cryptocurrency prices, like any other commodity, are directly influenced by the laws of supply and demand. In a nutshell:
With that said, there are multiple factors that could influence the supply and demand of a coin. Here are some examples.
Even with these in mind, it can still be challenging to find the right moment when to invest in a certain cryptocurrency. That’s why every experienced investor conducts three types of analysis before they take a step forward:
Even if you learn the three types of analysis and start applying them, there are still some pitfalls of investing in crypto that you should be aware of. Follow the tips below to be on the safe side when investing in crypto:
Concluding thoughts
The cryptocurrency market can be hard to navigate with the thousands of different cryptocurrencies available. Furthermore, the volatility can be a double-edged sword – it can bring incredible profits but can also make you suffer terrible capital losses. Hopefully, this article shone a bit of light on what you should do to stay safe when investing in cryptocurrencies. Remember to conduct the three essential analyses, and you should start finding safer market entries in no time.
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