The speeding rate of adoption of digital currencies had investors curious about adding these assets to their portfolios.
The crypto market seems to expand rapidly in 2024, mainly because crypto prices have rebounded to the levels they hit during previous bull markets. Many people ask themselves if they should join the market because it looks like a new bull market will start, and buying cryptocurrencies could bring them a return on investment. Crypto might be a young sector, but it has gone through several cycles until now, and we can use the events for reference when crafting trading strategies.
While no investor can read the future, specialized websites could make a BNB prediction, for example, because they rely on instruments that enable them to evaluate market conditions and estimate where a particular asset is heading.
Suppose you don’t know if investing in crypto is a smart move, this article tells you when it’s the best moment to buy digital currencies.
Image source https://unsplash.com/photos/person-using-black-and-gray-laptop-computer-GnWfl_nnZro
Make sure you understand what cryptocurrency is
Digital currencies have become vital for online users these days because they provide them with purchasing power. They are based on innovative blockchain technology and gained the status of an avenue for investment because they can provide a return if the trader uses the right strategies. However, cryptocurrencies are also highly volatile assets because they are decentralized, and no central authority issues or regulates them.
The term cryptocurrency is generic and is used to define assets based on blockchain. There are millions of cryptocurrencies available, and Bitcoin, Ethereum, and Ripple are some of the most popular. It’s challenging to predict which one will be the most successful in the next bull market because even if Bitcoin and Ethereum have the largest market capitalization, several others have performed better than them over the years.
What is the ideal time to buy cryptocurrencies?
Seasoned investors rely on several methods to decide when to invest in a cryptocurrency, but the same rule doesn’t apply to more than one market asset. Therefore, it’s crucial to research the commodity you’re interested in and tailor your techniques to it.
It’s alluring for everyone to turn a small investment into a high income, so here is how to interact with digital currencies to make a profit.
The ideal time of the day to buy digital currencies
The crypto market’s greatest benefit is that it allows investors to purchase assets at any time of the day. However, most experienced investors prefer to buy and sell digital currencies when the New York Stock Exchange is open. However, if you aren’t interested in trading other kinds of digital currencies, you can do it whenever it’s best for you.
Analyzing the data for a longer time is recommended to identify daily trends that might benefit your trading routine. Keeping an eye on popular assets like Ripple, Solana, Ethereum, or Bitcoin can also help you identify the ideal time of the day when to purchase each one of them. You’ll notice that their prices tend to rise and fall at different times of the day.
Some investors prefer to purchase cryptocurrencies in the morning before the New York Stock Exchange opens because their value is lower. Nevertheless, you should track their price fluctuations for a couple of days to identify any pattern that might affect their evolution.
The ideal time of the week to buy digital currencies
Suppose you decided to join the group of investors who buy cryptocurrencies early in the morning before the New York Stock Exchange opens; you might also want to pick the best days of the week because you noticed that digital currencies don’t perform the same daily. When you spend a long time on the market, you cannot help but see that some patterns happen only on particular days. For example, most cryptocurrencies are sold at lower prices when the market is less busy. As mentioned earlier, you can trade cryptocurrency 24/7, but the prices are lower in the morning, at night, and during the weekend when the market is less active. Monday morning prices tend to be the lowest as they follow the weekend and start increasing throughout the week.
Rules to keep in mind when buying digital currencies
Manage your risk
Risk management is vital when investing in cryptocurrencies because it enables you to protect your capital and achieve your goals without exposing your entire portfolio to risk. Here are some principles to keep in mind:
– Diversify your investment portfolio by purchasing assets from multiple categories (cryptocurrencies, stocks, real estate, bonds, and other similar assets)
– Understand your risk tolerance and your portfolio’s ability to withstand crypto price fluctuations. Determine if trading digital currencies aligns with your risk profile.
– Create an emergency fund you can use for unexpected taxes and expenses.
– Set stop-loss limits to minimize your loss in case the market goes askew.
Stick to the fundamentals
Investing in cryptocurrencies involves learning different things than when joining the stock market. You need to read White papers and stick with the assets that have real-world adoption potential, find out more about the developers and founders, evaluate market competitors, and engage with communities. Well-known projects are the best choice for someone who has just entered the market because they usually offer unique capabilities.
Use your common sense
Try to be objective when evaluating cryptocurrencies and don’t let FOMO rule your decisions. Stay away from hype cycles and meme coins because they rarely provide investors with profitable opportunities.
Diversify your portfolio and avoid overexposing it to digital currencies, even if they promise to provide you with a high return on investment.
Research the technology behind the projects
Take your time to learn more about the technology that powers the digital assets you want to add to your portfolio. Start by learning the crypto basics to identify legitimate assets from scams.
Parting words
Digital currencies are volatile assets and should be approached with caution. This article provides the necessary information to pick the right moment to invest.