The CEO of Berkshire Hathaway, Warren Buffet in one of his interviews disclosed that one of the mistakes people make in investment is to stay out of the game thinking a good time will come before they invest. The truth is that cryptocurrency investment is a long term game. This is obvious when we observe graphs showing its price history.
The history of bitcoin, for instance, shows a dominant feature of up and down curves revealing its volatile nature. Even though there is no obvious time to know when a cryptocurrency will record a bullish run, it is important to know that one can avoid the risk of losing money if they can determine when to buy, and this article will provide some of such tips.
Buy at a Dip (For Short Term Investors)
One famous statement among the cryptocurrency investors is: “buy at a low price and sell at a higher price.” This statement is always true. Many investors usually wait to buy a digital asset at the point when the price hits a massive bull run. The danger in this is that no one knows how long the Bull Run would last. The price curve may reach at the peak on the same day you buy the asset, and this would be a disaster for short term investors or traders.
For long term investors, when the curve moves to the opposite direction right after buying the asset, there may still be the hope of making profits knowing that the price would rise above the selling price in the future which can be weeks, months or maybe years.
To buy at a dip, study the graph of the asset, determine its lowest point and buy. Cryptocurrency price curves usually form a “U” shape or “V” shape, and this is common in its price history. Master how these shapes are formed and buy when the curve starts bending at the bottom (when the last part of the shape is about to form which is usually a vertical line at the right side of the formation.)
Buy Now (For Long Term Investors)
For long term investors, there is no need to buy at a specific time of the market. Bitcoin at a point recorded about 80% fall in its journey to the top, and around that time, several investors thought they were screwed. Bitcoin was trading below $1000 before it took that deep fall.
In December 2017, the price jumped far above its crashing price to record an all-time high of near $20,000. Investors who thought they had lost their fund in that short time suddenly hit the jackpot in the long run. In every time bitcoin fell far below its selling price, it took a high jump to trade above its previous all-time high price, and this has happened multiple times in its price history.
For short term investors, buy at a dip. For long term investors, buy now.
Disclaimer: The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.