The crypto market hit an all-new high last year, with over 46 million Americans owning crypto coins. With that statistic in mind, it’s clear that the future of cryptocurrency is hopeful. Of course, since the crypto market is still new and ever-changing, it can be challenging for newer people to understand.
Today, we will help you understand cryptocurrency trends and what to do with that knowledge. Understanding these trends will help you make the right choice when purchasing cryptocurrency.
Understand Technical Cryptocurrency Trends
If you’re someone with some experience in trading stocks, you may better understand the crypto market graphs. Cryptocurrency charts act in a similar way to traditional stock charts. The only contrast is that it’s a lot more volatile, and you need to act quickly to make a profit.
Analyzing cryptocurrency trends from a technical aspect involves historical volume and activity. Essentially, these are price movements and swings. Once you understand the cryptocurrency charts, you can try to understand what coin will go up or down.
Understanding Fundamental Cryptocurrency Trends
These trends are quite different than technical trends since they ignore the charts. They focus on what is influencing the rise or fall of cryptocurrency prices. You’re trying to understand what is supporting the value of the coin.
Since there are hundreds of different types of cryptocurrency, it’s important to comprehend the fundamental of the crypto coin you’re planning to invest in, as not all have a strong foundation. For example, you should ask yourself the following questions:
- What are the company’s ‘tokenomics’?
- What is the company doing with the investments?
- What are the plans for the future?
Once you answer these questions, you can analyze the trend from a fundamental aspect and make the right choice when investing. Be sure also to check out these DAO statistics to understand the cryptocurrency trends.
Understanding Sentimental Cryptocurrency Trends
The final trend you should understand is the sentimental trend. As the name suggests, it throws away any technical aspect and only focuses on following what popular investors are doing. These investors study the current cryptocurrency prices and then post their take on their social media accounts.
The main problem with this trend is that some of these investors create hype for a certain coin, and later it’s found out that the company paid them to promote their coin. Of course, this doesn’t mean that the coin is not worth investing in, but you should tread carefully.
Learn the Basics To Understand the Market
As you can see, cryptocurrency for beginners isn’t as complicated as it may seem. Of course, don’t only follow the crowd when choosing which cryptocurrency you’re planning to buy, as more often than not, it may lead to serious losses. You’ll need to put effort into studying the current cryptocurrency trends, so you can make a decent profit and have minimal losses.
Which trend do you analyze? Let us know in the comment section! Don’t forget to check out our other cryptocurrency posts as well.