One of the main skills that every player in the crypto market should have is the ability to feel the mood of the market. It helps to make successful transactions that bring big profits.
One of the most important indicators that you should pay attention to when analyzing the bitcoin and other cryptocurrency market is its volatility. Volatility is a market parameter that reflects the degree of fluctuation of assets and coins over a certain time period.
By studying the volatility of a particular currency, a player on the crypto market is able to assess the risks of investing in a coin and build an effective earning strategy based on this.
Let’s take a closer look at what affects the market volatility indicators, and what are the reasons for the instability of the currency in the crypto market.
Despite their volatility, cryptocurrencies, including bitcoin, continue to maintain their popularity, and the market is constantly growing. Of course, volatility suggests that a coin can lose value dramatically at some point. However, the coin can also rise in value quickly.Traders take advantage of this characteristic of a volatile market and profit when cryptocurrencies are expensive. But for this you need to buy it when it was low in value. This is the beauty and complexity of trading. It is difficult to build an effective portfolio of assets, however, when it starts to generate income due to market volatility, you feel why you spent so much time and effort.
It may seem that the volatility of the crypto market will not affect large coins such as bitcoin. However, bitcoin is still quite a volatile coin. And as strange as it may sound, this is due to its popularity. Bitcoin is constantly on the buzz, discussed by influential people, so it has a constant impact on him. Large corporations are large holders of bitcoins, so their actions and decisions affect the stability of the coin.
Of course, if you look at the last few years, the cost of bitcoin almost always only grows, but the coin still remains volatile. Blindly buying bitcoins and counting on the fact that the rate will grow indefinitely is not worth it. One way or another, Bitcoin will be a volatile coin, because, unlike the classical currency, it is not backed by gold.
Is it worth investing in cryptocurrencies, in particular bitcoin, in the near future? This question is of interest to both those who have been involved in the cryptocurrency market for many years, and those who just want to enter the field of the crypto market.
We have compiled for you the top reasons why you should consider the cryptocurrency market as a way to make money:
Despite the fact that today’s time can be described as a crypto winter, the forecast for the bitcoin rate is favorable. In the next few years, a bull market is likely to be expected, which means an increase in the value of such popular coins as Bitcoin. However, you need to be very careful when investing in cryptocurrencies by doing enough analytics and studying reliable sources, such as our blog.