Is Crypto A Good Investment? How To Read Crypto Charts?
Cryptocurrencies or cryptos are virtual currencies that are used to purchase goods and services. You can also trade them for profit or invest in them for later yields. Cryptocurrencies are typically backed by an online ledger and are more powerful than traditional currencies. Most people are interested in these unregulated currencies for profit trading because the value of cryptocurrencies goes up at times. “Making Profit” tends to be the primary motive behind crypto investments. However, there’s much more to the crypto world. We will explore the ins and outs of cryptocurrencies in this blog. So tag along to find out more about virtual currencies.
Why Invest in Crypto?
Cryptocurrency supporters are drawn to it for a number of reasons. Cryptocurrencies are the ultimate future of world economics. The value of cryptocurrencies increases with time. They can also be staked and you can yield great rewards through cryptos.
Crypto or virtual currency is actually a decentralized processing and data recording system that provides a safer transaction environment as compared to the standard payment methods. The central banks are typically responsible for inflation, but crypto reduces the influence of central banks on the money supply through its virtual transaction system. Crypto is gaining popularity with every passing day. But it is better to assess the potential of the specific currency before investing in it.
How To Assess Crypto Token Before Investing?
You can evaluate the future potential of a particular cryptocurrency by following the below-mentioned steps.
- Every cryptocurrency comes with an elaborate white paper. Study the crypto token’s whitepaper thoroughly and note the main features of the currency.
- Analyze the project’s leadership.
- Determine the legality of the situation.
- Keep up with the latest project announcements for the token of your interest.
- Take a look at the project’s social media pages. Explore social media to analyze the project specifics.
- Interpret Crypto Charts through thorough research.
How To Interpret Crypto Charts?
You would be asked to analyze the crypto charts whenever you think of investing in particular crypto. You might feel overwhelmed about reading the crypto charts. But worry not. We will walk you through the process of interpreting crypto charts. Let’s explore the crypto charts.
What Are Crypto Charts?
A crypto chart is a visual representation of the price, volume, and time interval of a token in the past. Traders must be able to read crypto charts to make their investments count. A crypto chart can help traders identify market trends and predict the future price and movements of an asset. These are some of the reasons why traders should read the crypto charts to find the best opportunities in the crypto market.
Technical Analysis of Crypto charts:
Technical analysis is the study of an asset’s past trading activity and price changes. According to technical analysts, technical analysis is a great predictor of future price movements. Any asset having past trade data, such as stocks, futures, consumables, currencies, and cryptocurrencies, can be used with it.
Hence, technical analysis of the crypto chart is a complete analysis of statistical data trends to determine how supply and demand affect a token’s future price movement. A good understanding of cryptocurrency market charts can help investors make intelligent decisions about when bullish and bearish trends will end.
Bullish and Bearish trends
Traders of cryptocurrencies should learn about bullish and bearish candlestick trends.
In technical analysis, a Bullish trend is characterized by asset prices moving upwards at a fast pace. Whereas, a bullish reversal trend or the Hammer Candle Pattern, indicates that a stock is reaching the bottom of a downturn. The small body of the candle represents the hammer’s head, whilst the longer wick indicates that sellers are driving prices low during a trading session, followed by strong buying pressure to close the session on a higher note. The upward trend should be confirmed by keeping a close eye on it for a few days, and the reversal should be confirmed by an increase in trading volume.
The Bearish trend is characterized by a downward movement of the price driven by the asset’s sellers. However, a shooting star candle pattern is a bearish reversal trend that appears as a rally that reached its peak before reversing downward. This pattern consists of a candle with a tall upper wick and a little body. Drive-by customers are greeted with opposition in a shooting star candle pattern.
Validity of Technical Analysis
The technical analysis aids traders in identifying trading opportunities by evaluating price trends and patterns on charts. The finest crypto charts can help you keep track of market fluctuations. But the crypto charts come with certain limitations. In order for technical analysis to be valid, all the available information about an asset must have been priced in by the market, which means that the item has a reasonable value based on the information.
Popular Technical Analysis Patterns
Whenever you will carry out the technical analysis of crypto in order to invest in it, you will come across some defined patterns. These are the popular technical analysis patterns. Let’s discuss them,
Head and Shoulders
Head and shoulders patterns are reversal patterns that appear at the top and bottom of a trend. It’s known as an inverted head and shoulders pattern when it appears near the bottom of a trend. These patterns depict a tug of war between buyers and sellers. One side eventually triumphs, leading to further pushback or withdrawals in the trends.
A wedge pattern can indicate market reversals that are either bullish or bearish. A rising wedge (which indicates a bearish reversal) or a descending wedge (which indicates a bullish reversal) are the two types of wedge patterns. They arise when a trend begins to level off, eventually leading to a breakout. Markets frequently move sideways, wedged back and forth until a solid direction emerges.
Support and Resistance
One of the most important aspects of interpreting a bitcoin chart is identifying pivot points. According to the charts, support refers to a price level that the asset does not drop below over a specified time period. The price at which the asset is not projected to climb any further is referred to as the resistance level. This is the point at which the number of sellers in the market for a certain digital asset outnumbers the number of buyers. Experts are recognized for recommending support and resistance levels to help traders when establishing crypto positions.
Goldies are ERC20 Coin and potential to skyrocket in value. Basically, Goldies are the Buzzshow Network’s native crypto token. The BuzzShow Network is a blockchain-based decentralized video-sharing platform. In the video media industry, it’s a game-changer. Users were awarded “Goldies” for each action they took on the platform. It doesn’t matter if they are viewing, sharing, curating, or uploading videos. You can stake your Goldies and earn a profit. Once you purchase a package, you will begin earning a profit on your staked balance according to the package you chose. Converting Goldies into ETH tokens is relatively simple. At supported exchanges, tokens can then be swapped for fiat currency or other cryptocurrencies.
Cryptocurrencies are emerging as the means of main transactions in many fields of life. It’s high time to invest in cryptocurrencies. However, you need to be mindful of the currency you invest in. Make sure to do some research. Understand the currency trends. Evaluate its future potential and then invest in it. Crypto charts are there to make investment decisions easy for you. So go ahead and take the plunge!