While investing in different types of cryptocurrency, the main factor which comes into play is price protection. Investing in any cryptocurrency without knowing the trends or the meaning of price volatility can severely impact your returns and even cause a loss. 2024 saw an increase in leverage trading which did not help matters as it only led to mass liquidations.
A lot of people make the big mistake of mixing their emotions and feelings with crypto investment. Keeping your emotions out of the picture will help you make level-headed decisions when it comes to your money. So when it comes to price prediction of cryptocurrency, you have to keep practicality and reality in mind. We have compiled a list of certain factors that will help you make better cryptocurrency price predictions.
Table of Contents
Do Not Compare Prices
Source: coingeek.com
If you are new to cryptocurrency investment, one thing that you need to understand is that comparing the price of two different currencies will not take you anywhere. Just because one altcoin is cheaper than the other does not mean that it has necessarily more or less value. The price of a cryptocurrency varies on its circulating supply and how much people have invested in it.
So rather than comparing the prices of two separate cryptocurrencies, it is better to research the trends of each one. Understand the trends as well as the market cap, and you will be better off making financial decisions. But never compare the direct price of a particular altcoin. If you truly want to compare, then try to make a table of the market cap, the current supply, and the price to have a better idea of whether or not you should invest in it or not.
Do Not Base Your Prediction on What Ifs
What ifs are situations that are likely to come true but at the same time are not likely to come true. The price prediction of a particular cryptocurrency is based on past trends and price volatility witnessed before rather than how it is supposed to go. So before you make a price prediction based on a particular market cap and altcoin will hit, take a step back and plant your feet firmly to the ground. Be practical in your approach to price production to get more accurate results. If you are still wondering about what ifs, go URL.
Be Aware of Recent Affairs
Source: economictimes.indiatimes.com
Current affairs will tell how Bitcoin and other cryptocurrencies are being accepted all around the world and whether or not there will be any curbs introduced. Certain governments are thinking of introducing regulations on Bitcoins and other cryptocurrencies to make transactions easier but, at the same time, easy to track for tax purposes.
Apart from knowing the regulations on cryptocurrencies, being aware of current affairs will also help you understand the crypto trends and how it is received in the market at any given time. Due to high price volatility, there is a great chance of prices rising and falling at any time, so being aware of the market trends will help you make better predictions. Getting relevant knowledge at your disposal will help you make more realistic cryptocurrency price predictions.
Look at What the Experts Say
You can surely make cryptocurrency price predictions on your own, but at the same time, knowing what more experienced people say can help you out. For instance, if you decide to research what experts are predicting about the prices of Bitcoin and other cryptocurrencies, you will get a basic idea of where to begin and what to expect. Knowing what the experts say will not discredit your prediction but will only help you in making better inferences down the line.
Don’t be Daunted by High Numbers
Source: cnbc.com
Many investors take a step back only by looking at the prices and feel daunted. Many people feel that 100 thousand dollars is a lot of money to be invested in a currency that doesn’t even have real-world value. But it all depends on how you are choosing to look at a particular cryptocurrency and its price. One trick that you can adopt for better price prediction and investment is to look at the market cap rather than the price of each coin.
Bitcoin costs $100,000, but the market cap is 2 trillion dollars. If you consider that Bitcoin is essentially resistant to inflation, you will realize that investing in it and predicting its price becomes way more easier than that of any fiat currency. The decentralization of Bitcoin and its limited value makes it a great investment for anyone trying to build their assets and wealth.
Many other cryptocurrencies also operate on the same principle. This simply means that the price of Bitcoin and other altcoins will continue to rise as more and more people start investing in it and the value of circulating Bitcoins and altcoins starts to reduce. For instance, the majority of Bitcoin has already been mined, and all that is left is 3 to 4 million coins for liquid trading. Considering the prediction of experts, it is possible to see a rise in the prices of different cryptocurrencies.
Target Your Investment Prudently
Any financial expert will advise you to be prudent with your investment when it comes to cryptocurrencies and diversify as much as possible. Your investment portfolio will be better off if it includes different cryptocurrencies rather than putting all your money into a single one. After you have done your price prediction, it is better to divide your investment amount and put it under different cryptocurrencies.
The Takeaway
The first step towards realistic cryptocurrency price prediction is to be level headed and calm. As much as doing the right thing is essential, avoiding small and stupid mistakes is essential too. You do not want to base your price prediction on false information or a myth circulating on the internet. Do your research and try to keep your emotions out of the projections you are making.
