If you have invested any money or interest in the cryptocurrency market, you know very well that almost all of the assets are extremely volatile, resulting in massive price increases or drops that could happen at a moment’s notice.
Although there is nothing that you can do to prevent price drops or control price increases, you can minimize risk and increase profits by paying attention to the market. If you are an investor or simply someone who has invested money in the industry, here are a few reasons as to why keeping an eye on crypto charts is important.
Paying Attention To Crypto Charts Allows You To Make Future Price Predictions
Investors who are engaging in either short-term trading or long-term trading pay attention to the charts. Why? The charts tell a story and allow investors to predict trends based on current price data and past occurrences.
In the world of investing, technical analysis methods are utilized by serious traders in order to gauge when price increases or price drops are about to occur. Depending on how long you are looking to purchase, hold, and trade certain investments, you need the charts to determine when these prices are expected to fluctuate.
Without this information, you will be blindly making trades, which could cost you money if you are not lucky enough to trade at the right time. This is one of the reasons why those in the industry recommend keeping an eye on crypto charts.
You Will Begin To Take Notice Of How Certain Global Events Impact The Market
If you dive into Bitcoin’s past, you will inevitably run into the infamous Mt. Gox hack. Mt. Gox was one of the largest exchanges from 2010-2014, handling approximately 80 percent of all Bitcoin transactions at the time.
It was later revealed that hackers had stolen over 850,000 Bitcoins during the hack, which was estimated to be $473 million at the time. During the collapse of the company in February of 2014, the Bitcoin price value took a 36 percent hit as a result of the lack of trust in the cryptocurrency and its security.
As you can see here, certain news has the ability to impact the price of cryptocurrency both negatively and positively. When you pay attention to the charts and the news at the same time, you’ll notice trends that correspond between the charts and the news.
You will be better prepared to deal with investments when you understand the correlation between the news and its impact on charts.
You’ll Begin To Understand The Nature Of Cryptocurrency As An Asset
While it is true that there is impressive technology backing cryptocurrency and several external factors that affect price levels, it is an asset in the end. The prices of assets tend to follow certain patterns and regardless of what might be affecting assets on the outside, there are certain things that never change in the market.
When you begin to watch the charts and understand cryptocurrency as it functions as an asset, you will begin to realize how you can tap into that nature and become a successful investor.
Using market tactics and watching charts will be very useful for those who are seeking to use cryptocurrency as an asset rather than focusing on the technology or the social changes that are occurring behind it.
Cryptocurrency is still new to the financial world and there is a lot that is not understood about what it actually it is or how it functions. To understand this financial asset, it is important that you keep an eye on crypto charts and stay up-to-date on industry information as it continues to change and evolve.
If you are interested in even more business-related articles and information from us here at Bit Rebels then we have a lot to choose from.