With the potential for a bull run to occur, the year 2024 promises to be another exciting voyage through the volatile landscape of the crypto market. Although the journey may still be full of inevitable dips and unpredictability, skilled traders should be able to navigate their way through the hurdles and make a profit. For experienced and novice crypto traders, alike, check out 5 tips for crypto trading in 2024. These tips will guide you through the process of buying and selling cryptocurrencies in 2024.
Top 5 tips for crypto trading in 2024
The crypto market can be a rollercoaster, hence, you Listed below are 5 tips for crypto trading in 2024:
1. Conduct thorough research on an asset before trading
As of 2023, there were more than 23,000 cryptocurrencies floating in the market, according to CoinMarketCap. However, you must note that even though you have many options, some digital coins are not as stable as others. So you must research the background of a token before you start investing to avoid getting into a rug pull.
Ensure that you read about when the token was launched, its founder, what the token backs, historical price fluctuations, and future projections. Researching different tokens is the most important part of your crypto investment. Doing thorough background research will ensure that you don’t fall for scam projects.
2. Prepare for a volatile market
It is no news that the crypto market is extremely volatile and subject to massive price swings because of its decentralization and upregulation. Factors like supply and demand, government regulations, investor and consumer sentiments, and media hype work together to create extreme volatility in the market. So you have to anticipate this nature of the market so it doesn’t come as a rude shock to you.
In recent years, the cryptocurrency market has encountered extreme highs and lows in the process. Hence, as a novice crypto trader, you need to be very careful when entering the market.
3. Avoid FOMO
FOMO, short for Fear of Missing Out, has always had a strong presence in the Crypto market. Most times, beginner crypto traders invest in cryptocurrency on impulse because of FOMO. However, this can be catastrophic, as it is a bad idea to invest in an asset without doing in-depth research and having a solid trading strategy. If you enter the market without having a solid plan on how to trade and make a profit, you may end up losing all your capital or selling at a loss.
4. Diversify your portfolio with different tokens
One of the best ways to reduce the impact of volatility on your investment is by diversifying your portfolio. When you buy different kinds of tokens, your portfolio won’t be overly affected if the price of one token plunges very low due to the volatility of the market.
Generally, as a trader, it is ideal for your portfolio to consist of Bitcoin and a few other tokens that are relatively stable. This helps to mitigate risks in the market and maximize your potential profits. Essentially, diversifying your portfolio as a trader will let you enjoy possible profits via altcoins whenever the price of Bitcoin drops and vice-versa.
5. Don’t hold altcoins too long
Any digital coin that is not Bitcoin is an altcoin. Generally, the price of most altcoins depends on Bitcoin’s market price since they are regarded as a far less expensive alternative to Bitcoin. Since the prices of Bitcoin and altcoin are relative to each other in the market, it is recommended for traders not to hold on to altcoins for too long. This is because the prices of Bitcoin are projected to keep rising in the future. Eventually, the growing Bitcoin price is likely to drive down the market prices of altcoin, which may lead to possible losses for both traders and investors.
Lastly, you should stay updated on the latest cryptocurrency news both inside and outside your country. This is because some news and global developments are likely to affect the market price fluctuation of cryptocurrencies. When you stay updated on crypto news, you’ll be able to make informed investment decisions and stay ahead of the curve.
How much crypto should you own?
Generally, different cryptocurrencies have different kinds of risk profiles and growth potential. Hence, if you want to have a balanced portfolio, you should aim to own a mixture of different tokens. If you’re a beginner crypto trader, start with just a small allocation of your general investment portfolio.
Most importantly, avoid investing all of your money into just one cryptocurrency. Ensure that you diversify your holdings across different digital coins to spread risk.
What is the best crypto storage in 2024?
Consider making use of a combination of hot wallets and cold wallets to help balance your security and accessibility. Generally, hot wallets are excellent for frequent crypto trading because of their ease of use and fast access to funds. Bitmama crypto wallet is an excellent example of this – download the app to enjoy the free wallet today. Contrarily, cold wallets are ideal for long-term storage as they have enhanced security.
It’s easier to navigate the exciting and unpredictable landscape of the crypto market following the tips for crypto trading in 2024 that we’ve discussed above. However, remember that having a trading strategy that aligns with your goals is just as important as all the tips listed above. Also, only trade with money you can afford to lose and do your thorough research before diving into any asset.
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