The global cryptocurrency market has recently started to significantly move up and down. Thus, experts told how to minimize the risks and increase the possible profit in the current situation.
The virtual currency market began to resemble a popular "roller coaster" ride after Bitcoin overcame another historical record value at around $ 42 thousand. Later, the price of the leading digital coin fell to $30 thousand during the descent, broke through the $40 thousand mark, and then declined again below $29 thousand.
In connection with BTC's frightening collapse, experts have prepared several useful recommendations for market participants.
First, there is no need to worry if the cryptocurrency, which was bought at the bottom using all the necessary indicators, suddenly rose by 40%, and then collapsed again. This is because the required profit level has already been provided. Therefore, you can fix the position, exit the digital currency market, and take a wait-and-see attitude if a market declines.
However, this is not suggested if the cryptocurrency began to steadily increase by 40%, and you wanted to enter the market. It is noteworthy that strong growth is always followed by a significant correction. In this case, it is necessary to wait for the fundamental prerequisites for further growth in the selected digital currency and invest in it after the correction.
But if you bought a cryptocurrency at its peak, and then it plummeted by 40%, you have two options. If the decline turned out to be the result of a speculators' game, do not worry and wait it out. It is still possible to take an upward movement in the near future.
However, you always need to clearly understand whether you are already in profit or not yet no matter what state the cryptocurrency market is in.
- If in profit, it is recommended to close positions, wait outside and enter again.
- If you are only planning to enter, it should be kept in mind that transactions from three days to a week are great during a turbulence.
Initially, you need to build investment expectations in advance before entering the asset. It is better to miss a profit than to sit in a loss-making asset for several years. And no matter how the asset grows, it is better to buy it from the correction.
As for the short-term prospects of the main digital currency, analysts believe that its rate will not rise above $ 40 thousand under the current market conditions.
Experts are confident that the demand from large institutional investors is not enough for such growth in Bitcoin.
Thus, the rate of infusion of funds into the main digital coin through the Grayscale fund reached a high and then began to decline. An additional threat may be traders who trade virtual currency futures. As a result, the combination of risks signals in favor of a decline in the market.
It should be recalled that investors have invested about $ 21 billion in BTC through the Grayscale fund. Over the past six months, the volume of digital coins bought by the company has grown from 350 thousand to 650 thousand.
Last Friday, Brent Messing, Skybridge Capital's President, said that the value of bitcoin could reach $500 thousand. According to him, the massive influx of capital from institutional investors will be the main condition for such a spectacular growth of the cryptocurrency.
