How to determine when to sell cryptocurrency?

Accurately guessing the time when the value of an asset reaches its peak is an art associated with luck. You can increase your chances if you follow certain rules.One of the most important things in cryptocurrency trading is choosing the right moment to sell. Nobody can accurately determine the maximum of the asset, as well as the minimum. Professionals use a variety of techniques to get the most out of their trading.

 

The art of identifying the moment

Sometimes there are factors that make the market situation predictable. For example, when during the “crypto winter” in early 2019, the price of bitcoin fell just below $ 4,000, many data indicated that it was almost impossible to bring it down even lower. Then there was a strong lack of supply on the market, investors expected growth, which happened. In general, one should look at investor sentiment and whether these sentiments have fundamental reasons. There are also methods of taking profits without guessing extremes that are available even to novice trading. For example, placing a series of small orders to sell an asset as it grows. For example, for every $ 10 rise in the price of a cryptocurrency, a trader sells a fixed amount. Then, even if the growth is a consequence of the bubble, part of the share will be sold at maximum prices.

 

An infinite number of factors

This is not to say that in order to predict the cryptocurrency market, you need to look at some specific event. You need to see the big picture and carefully monitor what is important at a particular moment. This is a huge combination of factors that works for each specific instrument. It is important to understand that these factors change from time to time.

Three important factors for cryptocurrencies at the moment:

  • Central bank quantitative easing policies and inflation;
  • Growth statistics for unique addresses in bitcoin;
  • The rate of growth of assets of crypto funds.

There is no one who can always guess! An example of trading tactics for determining the moment of sale:

We look at the chart, switch the candle size 2-4-6-24 hours. If the growth was long and looks like a trend, then a line can be drawn under it:

  • You need to hold it and wait for the schedule to go down under it;
  • You can leave some kind of gap according to the sensations, for example, 3-5%;
  • When the chart crossed the line and dropped below the gap, you can sell;
  • It is better to sell in parts, not the entire position at once.

For example, if the bitcoin rate decreases from $ 14 thousand, then it is better to sell at $ 13.6 thousand, $ 13.2 thousand, $ 13 thousand and $ 12.8 thousand.

How to “catch” an asset to buy. A fall on an uptrend will typically amount to 50% of past growth. In the case of our example – from $ 10 thousand to $ 14 thousand, the expert recommended paying attention to the level of $ 12 thousand. It is better to buy also in parts. Sometimes you can buy in addition to the fall, but this is risky. After that, it is worth waiting for a trend change and the beginning of a new wave of growth.

 

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