When to Invest According to the Cryptocurrency Rates

How often have you tried to analyze the BTC to XMR exchange rate in order to make a profit, but all to no avail? The truth is that the crypto market is not so easy to forecast. However, veteran investors and traders have developed a fair idea of how to profit from the cryptocurrency rates.  

Let’s try and do the same!

Key Factors

Offer and Request

Application of a Cryptocurrency

Regulatory Changes

Change in Technology

Media Sentiment

When to Invest

Summary

Key Factors

Factors that affect the cryptocurrency exchange rate and the fall-rise situation in prices.

Offer and Request

Trading or investing in the cryptocurrency market also operates by the law of offer-and-request. The higher the volume of a currency, the lower the price. However, scarcity of a currency will trigger increasing demand which in turn will cause an increase in its value.

Market protocols may allow the new digital coins to come at a fixed exchange rate. Alternatively, the market may also restrict the number of currencies (Bitcoin or Monero) that will be available on it.

Application of a Cryptocurrency

The application of crypto coins will also influence the exchange rate. Bitcoin is valuable because of its exchange; if everyone stops using it, it will lose its value. As the use of cryptocurrency increases, so does the demand and price.

Regulatory Changes

A country’s regulations on digital currency may affect its price on the market. So far, this practice is sporadic and limited due to worldwide boundaries, and it does not have much impact on cryptocurrency. Nobody knows if the efforts of various governments will be successful since cryptocurrencies were created to avoid such contacts.

Change in Technology

Technology changes lead to price turmoil in cryptocurrency. The Bitcoin price was negatively affected in July and August 2017 by a dispute over changing the basic technology in order to boost the time of a transaction. After applying this change, the Bitcoin value sharply increased to a record $4,000, from $2,700, over a two-week period. Similarly, news stories about the hacking result in a value drop.

Media Sentiment

Public sentiment plays a huge role in determining the price of a crypto coin. The price of a cryptocurrency can rise or fall depending on the kind of publicity and sentiment it receives from the media and public. 

When to Invest

Purchasing diverse cryptocurrencies will secure your portfolio from an unexpected fall and decrease the incidences of a possible loss. For example, if Monero falls sharply by 40 percent and Ethereum goes up by a similar volume, your investments will be stabilized between two coins. You should track such movements – e.g. with the BTC to XMR exchange rate.

Here are a few rules to help you decide on the best time to invest:

  • Buy when cryptocurrency falls and sell when it rises. This is a simple investment principle to follow in order to maintain a balanced investment portfolio.
  • Follow leading cryptocurrency. You should always follow the cryptocurrency market leader. If a currency trades higher than others, go for it; the “leader” status won’t last forever.
  • Invest in alternative cryptocurrencies. They’re often cheap and boast more bullish status than BTC, which often leads the market.

Summary

To predict an exchange rate with a high probability, you’ll have to get familiar with the factors that determine the prices of cryptocurrencies; it will also help increase your profit margin as an investor. If you want to know when to invest in crypto, consider the rules above.