Whenever cryptocurrency is talked about, Bitcoin always leads. But the increasing knowledge base of investors have made altcoins a bigger brand these days. There are always equal chances to make quick money or get busted.
Most people consider Bitcoin as volatile, yet nothing can be done on some of the upper and downward moves of some altcoins. Here, money can be made but as it is a different kind of ball game so a different kind of strategy is required.
When it is about investing in Altcoin, there are some strategies which can be applied and these are quite different from Bitcoin investing. The amazing thing is that they can help you witness massive paydays.
Firstly, Understand the Market
In order to truly understand the difference of investing in altcoins and bitcoin, it is important to analyze their performance.
When their past performance will be analyzed, two inferences can be made. One inference shows that Bitcoin still rules the market with easy and likely guaranteed results and another inference shows the unpredictable and disordered market of altcoin. However, there are few strategies which can be of help.
Before investing in an altcoin, check the ICO phase. If it is still there, invest in it. This guarantees a coin that is possibly the cheapest. However, ICOs are very common. So, if you wish to enter or are going to enter the dark world of altcoins investment, the best way to start is with ICOs.
Usually, coins move in a single direction and that is upward. This is possible after ICO but there is one other possibility – they can stumble very rapidly and dive to zero. When a coin enters the market, it suddenly spikes and that should be considered as an indication to sell. This way you can easily earn a good profit which can be anywhere between 100 to 300 percent.
In case there is no sudden rise in the value of coin, then before selling, you should aim to earn anywhere between 50 to 100 percent return. You can earn good returns with this strategy if your bets are hedged with few ICOs. Always remember not to put complete money in a single ICO.
In this strategy, the ICO mania can be avoided and you can hold your money and wait for a coin to enter the market. Aim for a coin that dips first after entering the market and if found one, do not delay buying it. This way you can get a coin at cheaper rate than ICO selling price.
The reason behind the fall of many such coins is that when they make a debut on the exchanges, the presale buyers and the ones who received free coins to help market the ICO, dump the coins in market.
You should be aware that this dumping can tilt the market capitalization of the company.
Another beneficial strategy can be holding the coin for little longer. You will witness an altcoin going both northwards and southwards. Then you can evaluate the charts and see the movements against MACD, basic technical charting, and various other signals.
On one hand, this strategy is more intense and complicated and on another hand this strategy is less risky.
All you have to do is regularly monitor candle patterns and the volume. This will help you identify whether the coin will rise or fall in future. Another thing you should do is continuously compare the market capitalization of similar coins and find out if it is overvalued or undervalued. With this method, you assess an asset’s conditions and determine the direction.