After a 50% correction, cryptocurrency might just be getting back on its feet. With the recent debate between some of the biggest names in crypto resulting in some positivity, is now the best time to be investing in cryptocurrency?
If you're thinking about investing in crypto right now, then make sure you avoid these 4 common mistakes with crypto investing.
1. Investing Too Much
When people see the potential upside of the cryptocurrency market it's hard not to get excited. But that upside comes with a lot of volatility and the value of any cryptocurrency is as subject to going down as it is up.
Before you invest, make sure you're only allocating as much money as you could afford to lose. Major corrections happen all the time and some coins don't recover.
2. Not Doing Your Own Research
Coin shillers are all over social media and YouTube. It's quite common for coins with little to no fundamentals to be hyped up on the internet. Shortly after the hype comes a crash these coins never recover from.
Don't just buy a coin because it's being talked about on Twitter. Be sure to do your own research. It's important to look at the price charts of coins to see how they have behaved in the past.
Also, be sure to research the company behind the coin and look into the practical applications of the coin. If a coin isn't doing anything to move the crypto space forward then it probably isn't going to survive.
Make sure you know about cryptocurrency in general too. Understand where the market has been and where it is going. Take a look at the following site for a run-down on the history of cryptocurrency: https://www.bytefederal.com/the-fascinating-history-of-cryptocurrency-then-now/
3. Chasing the Pumps
When you're looking into investing in crypto it's easy to fall into the trap of choosing coins based on their percentage gains. You might see a coin that has done 80% in the last 24 hours. Buying into these coins isn't necessarily a bad idea, but it is important to wait.
As with all other fluctuating investments, cryptocurrencies go up and they come down. If you see a coin that is moving quickly, wait to see when it settles, and aim to buy it when it corrects.
Learning a little about technical analysis can be a great way of finding the best prices to buy a coin.
4. Being Led By Emotions
The volatility in cryptocurrency can make it hard not to get emotionally involved. After all, it is your money. When your favorite coin drops 20% you might want to sell it.
It is important to remember that the market moves in waves and by understanding technical analysis you can plan your entry and exit points without having emotions lead the way.
Avoid These Mistakes With Crypto Investing
There is a lot of money to be made in cryptocurrency but these common mistakes with crypto investing can soon see the value of your portfolio decrease. As with any form of investment, only invest money that you can afford to lose and make sure you go into your investment with a plan.
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