First and the most important rule of surviving in the world of digital trading: buy Bitcoin when it has the lowest price on the market. However, how to use this rule on a practice?
Should you search for a guru who knows ins and outs of this world or should you go with the flow? In this article, we are going to bring up some general rules which may come to your assistance.
When Ribbon is constricted
After some time when miner starts to get coins, they exchange them to cover their expenses. Such decisions create a lot of pressure on cryptocurrency and its level. Those miners who find fewer coins, as a rule, try to sell bitcoins to continue their mining. In a case of failure to pay off expenses, people leave this sphere. After that pressure on network loosens which usually means one thing: the ribbon is constricted.
If miners are productive and sell fewer coins only they stay on the market. Which means they know that after their unsuccessful counterparts leave, and low pressure from sellers stabilize the price. As a result, price starts to rise and at that moment you may buy Bitcoin successfully.
Those who are not educated enough usually end with the market after halving. That is another mistake when half of the coins start to be mined ribbon is compressed. However, the costs are still the same and Bitcoin price still will be trying to relate to changes and to stabilize. In light of this traders should be very careful with their decisions.
Choose Weekends Instead of Weekdays
Time after time Bloomberg and other specialists prove to us that the rise of cryptocurrency emerges on the weekend. One such example was in May the previous year when bitcoin price grew by 40% exactly on the weekend.
Before Monday comes you should be prepared for it. Thus, trading with cryptocurrency takes place between weekdays. Miners are tided to their sits because they will never know for sure if Monday brings any changes.
Also, there is an important news informant as the Commodity Futures Trading Commission (CFTC). As a rule, they inform about any changes in the behavior of traders. There is a huge interest in investors and speculators for whom such information may help entering the market at the right time.
The Method of The Fisher and Buterin
If you wish to buy bitcoin, remember Fisher’s formula. It is widely used to estimate possible assets and any projects connected with cryptocurrency.
MV = PQ
“M” is for cryptocurrency, “V” is for a number of coin transfers for some period, “P” is for the price of your asset and “Q” is for a volume of production. Irving Fisher’s formula helps to take into consideration a total of real and digital funds you have.
However, the founder of Ethereum decided to slightly alter a formula. He changed production volume “Q” into the whole number of transactions or everyday economic evaluation “T”. As an example, Vitalik Buterin gives such a situation: a certain number of coins “N” go from hand to hand “M” times per day, which creates a certain economic value for one day “M*N”. If we have an economic value of $ “T”, then it brings us to the price of one coin “T/(M*N)”. The price level will be opposite “M*N/T”.
When is the moment right?
Some people are guided by experience, someone other is guided by intuition or by methods above. However, all of us should remember that any method may fail your confidence, so always be careful with what you plan to do when the moment is right. You may choose between your luck and knowledge when you know what and how you put at risk. This situation does not relate to those of us who still learns the ropes of the world of cryptocurrency.