Behind each up-and-down of cryptocurrency rates, there are hundreds, thousands, or even millions of dollars that one loses and others put in their pockets. To be among the winners, you can turn to an oracle and hope for a stroke of luck, but it is better to learn how to read the signals from the crypto market by yourself. Today we will share our observations on how to predict the crypto rates. Let’s roll!
1. Read an exchange order book
It’s one of the best ways to predict the price movement of crypto. This tool visualizes a real-time list of outstanding orders for a particular asset. Order books represent the interests of buyers and sellers, offering a window into supply and demand.
Order book gives an opportunity to make more informed decisions based on the buy and sell the interest of a particular cryptocurrency. It provides a “behind the scenes” view into live-action supply and demand which may reveal order imbalances, market manipulation and support/resistance zones — all of which can be used to your advantage.
2. Check out a traded volume
Traded volume is also used as an indicator to guess the price of crypto. It shows the total amount of traded currencies per day, week, month, or the number of currencies sold from hand to hand for a specific period. This indicator reflects the popularity of a certain cryptocurrency. The higher the score the more popular currency is. At the same time, a large volume of trade does not always indicate an upcoming price increase.
3. Follow the news
This factor has a significant impact on the crypto market. One of the most important in this regard is the announcement on regulations and legalization of cryptocurrency. For example, in September 2017, Bitcoin went down by almost 20% per day because of the rumors about a ban of the crypto market in China.
To predict further market swings it makes sense to monitor the activities of the cryptocurrency creators. News or even rumors of fraud will immediately bring the cost of the crypto down.
From the opposite side, the good news such as attracting the number of supporters, large corporations or even celebrities will have a positive impact on the crypto market indicators. For example, the price for Waves tokens took a jump after the announcement of a partnership with the Microsoft Azure.
4. Do not forget about crypto forks
For example, the creation of Bitcoin branches such as Bitcoin Cash and Bitcoin Gold with a modified transaction confirmation protocol often led to an increase in the value of currencies, as owners of Bitcoin wallets automatically received new coins. But the opposite reaction is also possible. Like when Zclassic network fork went down in value as it did not meet investors expectations.
5. Watch out for speculations
Sometimes big players arrange the so-called pump and dump on the crypto market. In plain words, this means a fast artificial growth in the rate of a certain crypto-currency (pump) or its decline (dump). Pumpers are massively buying coins and creating the illusion of steady growth of rate, forcing newcomers to buy crypto. At the peak of activity, they turn into dumpers and decline their assets, dropping the exchange rate to the minimum values. It is practically impossible to forecast such behavior since it is not due to obvious factors, but you should remember that after a long-time pump there always is a dump, causing panic in the market.
6. Develop your knowledge about cryptocurrencies
Every crypto coin is unique. Some of them offer decentralized internet access, some of them offer quick money transfer from mobile, etc. Learn more about them! Also, keep track of the source code of coins. It will help you understand how strong their security is. Be aware of what you are investing in.
By the way, the Stealthex exchange service is designed to allow you to buy and sell up to 200+ cryptocurrencies. It’s convenient and user-friendly. You should definitely try it out!
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