When is the Right Time to Buy Bitcoin?
by Mary Ann Callahan
With the highs and lows in the Bitcoin value and its obvious profitability, more and more people are asking the questions of whether they should get into the trade or not. And another big question on the minds of those, who have already made that decision, is the question of when the right time to buy Bitcoin is.
We will not be giving you a direct answer, and we strongly advise you not to take the words of pundits who claim to offer price charts and pick specific dates for it. We believe a few well-informed pointers that will help you make the final decision is the best that we or anyone can give you. So here are a few things to consider in determining the best time to invest your money in Bitcoin.
Go for knowledge
This might sound like something from the textbook but really, the best answer anyone can give you on the subject is to suggest you to educate yourself. Buying Bitcoin is similar to any other asset trading, and what works there works here too. One of the most important things you must go for as an investor is understanding what you trade in. Before buying Bitcoin, commit yourself to learning the ropes and understanding the market. That is by far the best way to know when it is worth buying or selling your coins.
Apart from being able to defend yourself from the many critiques of the Bitcoin trade, learning more about it yourself will save you the headaches of running after analysts and self-professed market watchers with their inaccurate data. When you learn to read the charts by yourself, it will help you solve the issue of knowing the best time once and for all. There are a number of materials, books and videos available for you to acquire real and accurate guidance for beginners.
In a world where everything has become digital, it is a great idea to leverage on technology. One of the great ways to understand market charts and projections is to make use of apps and software. They make it easy to track market changes and pick the perfect time to throw it all in. Some popular apps for charting include TradingView, Plus500 and BitcoinWisdom.
Know the kind of trader you want to be
Buying Bitcoin and making gains from it is all about strategizing and planning. Most of the times making a decision to buy is dependent on the kind of buying strategy that you feel works best for you. Do you want to buy and hold or buy on the dip? It is important you understand these strategies and know how to make them work for you.
Buying and Holding
This is a very popular strategy not just in the world of Bitcoin trading but in the general business world out there. The idea of buying and holding, also popularly referred to as HODL, is a long-term buying strategy where you buy Bitcoin in hopes that it will appreciate in value over time. Employing this strategy is all about gathering much information about the market to educate yourself. This then helps you determine your own opinion when you want to put in your money based on what you feel will happen to the currency. Many experts claim that a good mindset to have when using the buy-and-hold strategy is to invest just the right amount of money, the one you could lose in case of eventualities.
Buying on the dip
This is another interesting approach you can take to buying Bitcoin. Given the volatility of Bitcoin, it is almost inevitable that prices will fall at some point. The strategy here is to take advantage of this fall in prices and make your purchases. It might sound a bit counterintuitive to invest in the market when the value of the currency is low and without assurance that it will rise anytime soon. However, if you understand the volatility of the Bitcoin market, you realize how much of a smart move it is to take this approach. Prices might be down today and appreciate right the next minute, so if you are willing to take the plunge, the dip is just the right time for you.
Understand markets
You should be able to listen to the market without actually getting carried away by the various emotions all around you. As a Bitcoin trader, knowing the opinion of others in the market might be a great way to decide the right time to buy too. However, this has its downside as “expert” opinions might turn out to be inaccurate. And pessimism on the part of many buyers may trick you into selling when you should actually be buying. It’s all about being able to gauge the mood around you and using that to set yours.
Understand trends
Like every market, Bitcoin trading has a pattern, and identifying that pattern before making your next investment is key to making profits. Being able to study subtle changes and identify consistencies in rising and falling prices is important in a market where volatility is the everyday business.
Most times market trends start slowly and gradually pick up as more and more people identify the prospects and are pulled into the frenzy until an all-time high is reached. After that, a violent reversal usually follows. Being able to identify parabolic trends like this will ensure that you don’t enter the market at a wrong time and helps you to make purchases at the right time.
In conclusion, while there is nothing like the “best” time to buy Bitcoin, the decision as to when to buy or sell is completely up to you. What is most important is that you adequately educate yourself so that you are informed enough to make the best decisions. The best things to trust is always your well-informed guts.
