When To Buy And Sell Cryptocurrency
Recent statistics reveal that there are as many as 7,812 cryptocurrencies across the globe. These cryptocurrencies collectively make up $324.716 billion in market capitalization.
If you break down these statistics further, you find that about 100 cryptocurrencies have at least $100 million in market capitalization. Meanwhile, 5,000 cryptocurrencies have under $10 million collectively in market capitalization.
This is a big variation and a telling story. It further complicates decisions for investors. Knowing when to buy and sell cryptocurrency can seem rather fuzzy, especially with so many cryptocurrencies in the market.
You buy a cryptocurrency and sell cryptocurrency intending to make a profit. So, while timing is everything, knowing the right time is more of a prediction than a fact.
Keep reading to discover why there are so many shades of gray with buying and selling cryptocurrency.
Cryptocurrency Buying Guide
Crypto has a reputation for volatility. You see many ups and downs with it. That is why many people research and try to find the ideal time to purchase, so they can get the best price.
The challenge is that investors are global, trading cryptocurrency 24 hours a day. Timing your purchases right does not have a perfect answer, in black-and-white terms.
Instead of looking for the best time to buy cryptocurrency, you want to practice dollar-cost averaging. This means that you buy a little bit for a duration of time, versus buying it all at just one time.
What happens, in this case, is that while you may not always buy cryptocurrency at its lowest price. Other times, you could catch the price quite low. The idea is to average it out, your highs and your lows.
Best Time to Buy Cryptocurrency
Let’s simplify this even further for you, the question of when is the best time to buy cryptocurrency.
When you are ready to buy cryptocurrency, this is the best time to buy. When you use dollar-cost averaging, this helps to limit what you could lose because of volatility. To some degree, you have a bit more control.
Another thing to keep in mind is a lot like what someone will tell you about gambling. There is no guarantee of results, that you will win or lose with cryptocurrency investments. Therefore, do not invest in crypto unless you are willing to lose.
There are people who will tell you they made a tremendous profit from buying cryptocurrency. However, not everyone who invests in cryptocurrency can say the same thing. It is not so much about timing their purchase right, but rather, being lucky.
Best Time of Day for Buying Cryptocurrency
It trades 24 hours a day. No matter where you live, any time of day, cryptocurrency is trading. That is why choosing the right time of day is such a complex question.
That said, you could still analyze the data from a few months and see patterns. What you would find is that trading activity goes up and goes down at about the same time of day, which is helpful for investors, in these particular cryptocurrencies:
- Binance (CRYPTO:BNB)
- Bitcoin (CRYPTO:BTC)
- Cardano (CRYPTO:ADA)
- Dogecoin (CRYPTO:DOGE)
- Ether (CRYPTO:ETH)
- Shiba Inu (CRYPTO:SHIB)
- Solana (CRYPTO:SOL)
By seeing the trends for these cryptocurrencies over a few months it gives you an indication of what the highest market capitalizations are.
Looking back between early June through early September 2022, in the United States, the afternoon was a popular time of day to purchase.
Best Time of Week to Buy
Using the same data for the best time of day also finds popular times of the week to buy cryptocurrency. Tuesday seems to be the best day. Trailing behind Tuesday is Thursday and Saturday.
Of course, this is not a perfect formula. When there is fear of the market dropping, this can negatively affect cryptocurrency, causing random and deep drops in price, any day of the week. There is no other connection other than human emotion to explain it.
If you are looking for a place to buy cryptocurrency on a Tuesday, or any other day of the week, click here to learn more about the best locations to make investments.
Best Time of Month to Buy
It’s challenging to time investments with cryptocurrency because it changes so much. However, trends show that usually, the best time of the month to buy cryptocurrency is at the end of the month. This is because trends also show that the value rises at the beginning of the month or the first ten days.
Many times, you see a price collapse after this. This could be because many investors wish to sell their cryptocurrency after the increases they see.
Again, these trends are from coins with a high capitalization rate. Smaller altcoins vary in their trends.
Once you buy cryptocurrency, you also want to sell it at the right time, too. This is how you can maximize your gains. Like buying cryptocurrency, selling can also be treacherous because of its volatility.
While there are no set rules, just like buying cryptocurrency, you could make an educated decision by researching trends and proceeding with caution.
Here are some things to remember when selling cryptocurrency.
Lack of Development Progress
Sometimes cryptocurrencies and their project will have a great start. They are ambitious. It quickly rises in value, and the token fairs well in the market.
Over weeks and months, however, it could bleed, and the price suffers. The reason that the value drops in these cases is that a project did not complete enough development progress.
Crypto teams continue to build products and they may not live up to their expectations. Investors should be able to identify this issue quickly.
For this reason, good cryptocurrency teams work to offer regular updates and place importance on transparency. When you are not hearing communication from a cryptocurrency team, you could assume they are not able to meet development goals. This is a huge indicator that it is time to sell.
Gaining a Substantial Amount
Of course, you could find that you buy cryptocurrency, and it skyrockets, even doubling its initial price. If you find you already have a big profit margin, you could sell. This is an excellent opportunity.
However, it is up to you if you want to take your profits and reallocate your capital. It is a good move. However, you could also continue to sit on your crypto investments and wait.
Selling Cryptocurrency to Reallocate Funds
Regardless of if you have strong losses or returns from buying cryptocurrency, you could consider reallocation. This means you could cash in on selling cryptocurrency or simply cut your losses.
Many cryptocurrency investors choose reallocation. Often, it could be because their cryptocurrency is in the red.
You can take the cryptocurrency you still have and place your investment in a different project by buying another crypto, which may help you come back from a loss. Also, there could be a promising asset you are more likely to profit from.
It is important to remember the volatility of crypto, and nothing is guaranteed. Just make sure you are comfortable with your decision before you act on it.
If you feel that your current cryptocurrency investment is a project that is sound, then stick with it. Even if there are dips, you do not have to reallocate your funds, especially if you are not ready.
A Flurry of Negative News
Cryptocurrency news can have a mega impact on the cryptocurrency market, just like the news can affect investors in the stock market. However, although they are similar (crypto and stocks), negative news has a much bigger impact on crypto investments than it does with stock.
Even social media plays a role in how the crypto market fairs. In fact, recent statistics show that Bitcoin alone has 28,866 posts on social media daily.
In cryptocurrency, transparency is everything. Influencers make a significant impact. Large gains and losses, as big as a double-digit figure, can occur, all because of headlines.
You have probably witnessed such occurrences. A string of negative news hits and results in a project and its token tanking. Keeping in touch with the market and its news gives you powerful insight as to what is going on, so it is important to keep your eyes peeled.
Tips for Buying Cryptocurrency
If you are new to investing in cryptocurrency, getting your feet wet can come with a tremendous learning curve. Crypto is unlike other forms of currency, so you have to put aside what you know about other financial institutions, as it will not apply here.
However, once you understand a few key pieces of information, it will make buying and selling much easier.
Join an Exchange
A platform on which you can buy cryptocurrency is called a cryptocurrency exchange. There are many to choose from. Most are structured similarly.
You can buy, sell, and even open a wallet. This is a safe place to store cryptocurrency. When you are on an exchange, it makes it simpler to see the stats of types of cryptocurrency, such as Bitcoin for example.
To research and do your own analysis, seeing stats is critical. You will want to make sure that anytime you buy cryptocurrency, you are monitoring its stats carefully.
Monitor the Stats
Here is a golden rule you should always follow. Only buy a cryptocurrency when the crypto is down. This is when it will be worth the most because if you buy a cryptocurrency when it is high, it will make it very challenging to earn an investment.
Keep It Secure
After you follow the golden rule, leave it alone. This is how it will grow. There are many day traders who buy and sell cryptocurrency all day long.
You could make some quick earnings this way. However, when you can leave it for a longer period, this will help a crypto investor build wealth. Being impatient can hurt profits and keep a secure investment.
You do not need to be a part of an exchange to join exchange. However, there are many benefits to joining an exchange. It is worth trying when you buy cryptocurrency, especially for beginners interested in doing their own research.
Have a Plan
Even if you are a beginner, it pays to have a plan. You should plan to buy low. Then, plan for how many gains you want.
If you have a long-term strategy, you will want to check cryptocurrency stats daily, unless you are thinking about buying more crypto.
Short-term strategies need a plan, too, though, and require closer monitoring. You can have a future sell date in mind, but it is important to be flexible to maximize potential gains.
In the world of cryptocurrency, strategy is everything. It is not something you can gain overnight. It comes with time.
As you gain more experience, you can always continue to tailor an excellent cryptocurrency investment strategy.
When to Buy and Sell Cryptocurrency
Now that you have a good understanding of the overall guidelines for when to buy and sell cryptocurrency, it will help to make an educated decision. There are no set rules, only good pieces of advice to follow.
There is always a bit of a gamble in cryptocurrency, but at least by following these tips, you can improve profits and mitigate losses where possible.
For all things finance, we are always releasing timely articles to help you make smart financial decisions. We have a lot more tips like this for investors, so don’t leave just yet. Keep clicking and learn more!