4 Signs To Look Out For In The Next Big Cryptocurrency

by Trading 101     Jul 16, 2019

Cryptocurrencies are the new big thing and have been a big part of the mainstream media’s attention for a better part of 2017. As anyone who’s passed a recent Trading 101 program would know, there is more cryptocurrency than just the ever famous bitcoin. Ever since the rise of the cryptocurrencies, different types have emerged all over the internet, with whole new marketplaces to trade on being established. Everyone is now in a race to find the next big cryptocurrency as this new commodity has taken the world by storm with its revolutionary technology - so let’s identify what the big indicators are that a specific cryptocurrency is going to be successful.

1.The price matters

Like with all commodities, price is always a factor and that’s no different with cryptocurrencies of any nature. Most investors looking to get into the crypto space probably don’t have the capital to buy into the big expensive ones, so the best bang for buck would come from currencies that are currently low in terms of price but have the capacity to grow aggressively in the future. There are plenty of currencies that are being traded at below a dollar per token online. And of course, the usual investment strategies should be followed: build a diverse portfolio, as you were taught in Trading 101.

2. Adoptability

The success of a currency is going to largely depend on how likely it is to get widely adopted, meaning that its demand is going to scale massively. Some currencies such as XRP and Ripple have grown tremendously since the end of 2017 and have the potential to hit mainstream attention anytime soon, especially with the interest of big banks now. If you’ve done your research and homework and can spot which crypto is going to have an edge over other currencies due to innovative technologies or some other determining factor, then that’s probably the for you to keep an eye on.

3. Supply & Demand

Again, like all other markets, supply and demand are a big factor. Supply of any given cryptocurrency only goes up if it’s being actively mined, which is a lot easier said than done. Most cryptocurrencies have a predefined limit on total supply - so once that limit is reached, no new tokens can or will be produced. If supply can’t go up, but the demand and interest in the currency does, the price will skyrocket - after all, bitcoin prices are all determined by how big the demand for them is.

4. Momentum

If you’re getting into the cryptocurrency space, you need to treat it the same as you would regular day trading. You need to look up all the relevant information, review market charts, consider external factors that affect currency price - the same preparation you’d do before opening new positions for your regular market trades. Momentum is a large part of crypto, just how trends are important in classic trading.

The last thing to remember is that investing in any sort of cryptocurrency, regardless of type, is as speculative and risky as trading in other markets is. Never forget that no one can predict the market, no one can foretell which currencies might go up and no one is guaranteed to make any money. Plenty of people maxed out their credit cards while bitcoin was trading at $20000, believing it was going to jump to $50000, only for it to crash and drop down after breaking $36000. Many have already lost money on crypto for being careless and have no real trading experience.

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