Positivity has taken over the crypto market, thanks to a BTC that has already managed to conquer $ 20,000 leaving the ground clear until the moon. Perhaps the news that the current behavior of Bitcoin is generating is encouraging you to invest in this asset; However, first I recommend you review the advice that we give you below.
4 tips to keep in mind before investing in Bitcoin
Analyze how prepared you are for volatility
In financial markets, volatility is the measure of the frequency and intensity in which assets move. It is said that an asset is volatile when its price fluctuates very quickly.
Without a doubt, volatility is one of the most outstanding characteristics in the crypto market. This is so due to how new it is and consequently the small capitalization it has.
For Bitcoin, fluctuating 10% is something simple, as we are seeing today with a rise of 16% in the last 24 hours. However, just as it goes up it can also go down.
For example, there is currently a high risk of correction in the near future, perhaps 20-30%. If you trade at today’s price of $ 23,214, and a sharp pullback soon begins, your psychology may not be strong enough to withstand a 20% loss in a matter of hours.
Buying at discount prices is always the best option to invest in Bitcoin
Today we see Bitcoin with a fairly high price. This is probably what is attracting you to invest in it, however one of the most popular tips in the investment world is to buy low and sell high.
This advice goes very hand in hand with the previous one, because the higher the entry price, the greater the risk of being inside just when a strong correction begins.
In any case, if you have a plan that tells you that it is a good time to enter even when the price is high, you don’t have to worry.
Don’t get carried away by the FOMO, make a trading plan
If you are thinking of investing in Bitcoin because you saw the high prices it is reaching in a headline, it is quite important that you take this advice into account.
Generally when the price of an asset hits the headlines, it is too late to enter.
From my point of view, it is currently not a bad time to invest in BTC. But for you to see it that way, you should first take into account other aspects, apart from only seeing news that generates FOMO (fear of missing something).
If you really want to profit from an asset, all your decisions should be based on a trading plan, which will tell you why it is a good idea to open a position, why to close it, when to take profit, etc.
Learn about the fundamentals behind the price
Without a doubt, the advice that will work the most for you if you plan to invest in Bitcoin at all-time highs.
Currently the largest of the cryptocurrencies is positioning itself as one of the best stores of value, and the price at which it is trading today will probably be really low when the big institutional that are entering the market take the price of Bitcoin to the moon.
However, for you to take advantage of the rally that so many crypto enthusiasts are waiting for, you must be able to wait quite a long time, perhaps several months or years, as well as having the courage to endure various ups and downs along the way. And to be able to do this you first need to fully trust the fundamentals that make Bitcoin trading above $ 20,000 today.
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