In this article, we will be discussing the major ways on how to make huge profits by investing in cryptocurrency. Being successful in crypto is not a day job neither does it come overnight. Mastering cryptocurrency investment takes time. It takes months and years of trials and errors before unlocking the tricks to crypto success. There is no one crypto trader who can brag of never losing in crypto. So called crypto gurus today are products of learning from years of pain and mistakes. I am one of them and I would like to share my discoveries with you for free.
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This is What Affect Cryptocurrency Market Price
Before one can make huge profits by investing in cryptocurrency, it is paramount to understand the volatile nature of crypto. Cryptocurrencies’ volatility is actually where the gains and losses are made. One major characteristic of crypto is its volatility. Crypto is the most volatile investment ever known to man. Just now, the price of bitcoin (BTC) could be $48,200 and in a second later, $48,500. It goes up and down every time. This has discouraged a bunch of crypto noobs who have tried investing in it.
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Why is Cryptocurrency Volatile?
Simply put, cryptocurrency is volatile because it is influenced by supply and demand, investors, human emotions, media hype, etc., It is also fair to add that there are certain persons who are so influential that anything they say could either crash or make crypto prices skyrocket. One of such individuals is Elon Musk. He is popularly known for his influential tweets that not only affect cryptocurrencies but also affects the stock market.
In May 2021, Elon Musk’s tweet about the negative impact of bitcoin mining drove cryptocurrencies into a bear market. Also his tweet about investing over 2 billion dollars in bitcoin and Doge Coin took crypto prices to their all-time highs (ATH). Such factors are responsible for the volatile nature of crypto.
How to Make Huge Profits by Investing in Cryptocurrency
Once you are aware of the insane volatility of cryptocurrencies and the reason for the volatility, logical decisions can be made. Timing is everything in crypto and before huge profits can be made, one has to understand crypto timing. There are two major crypto timings.
Bull Market Timing
This period is characterized by bullishness. That is, this is the period where cryptocurrencies go up and sometimes make new All Time Highs (ATH). Majority of crypto traders and enthusiasts always look forward to this period because this is the time money is made.
Bear Market Timing
This is the opposite of bull market where the reverse is the case. Prices crash and sometimes revisit their all-time lows. While some prefer the bull market, some weird crypto enthusiasts like the bear market because they believe they can make more of the cryptocurrencies they trade.
The Crypto Success Trick
Emotions play a large role in making decisions when it comes to investing in cryptocurrency. To make huge profits in crypto demands a total denial of emotions. This is because emotions cause greed which is always responsible for losses in cryptocurrency investments. The crypto success trick simply refers to the art of identifying the bottom price of a specific coin or token and taking advantage by loading up on it.
This could be tricky most times as we think we have bought the bottom then prices dip more and more. While this could be frustrating to noobs, it is normal to those with experience. It is better to buy the bottom and sell the top than buy the top and sell the bottom. But how do you know when it is the bottom? The truth is that no one really can tell the bottom. Sometimes, one could be lucky by calling the bottom via reading the crypto chart but this is not always the case as cryptocurrencies are mostly unpredictable.
The trick to buying the bottom is to divide your capital into 4 equal parts. You allocate the first portion for the first dip and if the dip persists, you allocate the second portion and if this repeats again, the third then the fourth. This process is referred to as buying the dip of the dip. I must tell you, that is the smartest move in crypto. Those who buy the dip make huge profits particularly when they know when to sell.
Know When to Sell
Knowing when to sell is the final technique in making huge profits in cryptocurrency. What is the essence of buying the dip when you do not know when to sell your bags? Most times, a lot of crypto investors miss out on huge profits because greed made them miss the top. The smart crypto investor must know when to sell.
There are different indicators that signify the perfect time to sell your bags. I personally will admonish that you stick to one or two.
Relative Strength Index (RSI)
The Relative Strength Index (RSI) indicates the strength of buyers and sellers in the market. When the RSI is low, it signifies a dip or bottom price and when it is high, it signifies the top. If you are following the RSI indicator, I will advise you sell at 70 RSI to be on a safer side. This is because waiting for a 75 or 80 RSI could be very dangerous. Most times, risking these numbers make you lose out while the market liquidates on you. It is fair to say that the RSI could even get to as high as 95 signifying that the cryptocurrency is overbought. The next thing that happens is often a crash.
Fear and Greed Index (FGI)
This index indicates the level of fear and greed in the market. Wise cryptocurrency and even stock traders buy when everyone is fearful and sell when everyone is greedy. Just as the RSI, the FGI also has numbers indicating fear and greed. The lower the number, the level of fear and the higher the number, the level of greed. To identify the bottom, you should buy when the number indicates extreme fear and sell when it indicates greed. Most times, the difference between the period of extreme fear and greed is always over 200% profits. This shows that those who spot the bottom always make quick profits as the market begins to boom again. Now you know how to make huge profits by investing in cryptocurrency.