Volatility is an intrinsic characteristic of cryptocurrencies. This is why it generates so much uncertainty to decide what is the right time to buy. Although Bitcoin is a moderately stable digital currency, it does not escape this reality. In this overview of the cryptocurrency we will provide you with information so that you can make the best decision to acquire your BTC without fear of regret.
Cryptocurrencies vs. supply and demand
As is already known, the exchange of cryptocurrencies is decentralized, which means that the cost is not imposed by any organization or entity. So, who sets the price? What parameters are followed to buy cryptocurrencies? Simply put, it is measured by the decisions of investors. This is known in financial parlance as the law of supply and demand. Although decentralization is one of the most attractive features of cryptocurrencies, at the same time it confers a high investment risk. The high volatility of Bitcoin and other digital currencies is precisely due to the supply and demand of a very emotional market. So says Ollie Leech, the editor of CoinDesk magazine who defends the fact that traders are still immature. According to the expert, the constant fluctuation of BTC is explained by the growing uncertainty of participants, fear and anxiety to raise returns. The lack of financial education has led to the fact that price charts are subject to the opinion of celebrities. This being so, the law of supply and demand is a force that always has the capacity to play against the investor. It is a latent threat that will diminish proportionally to the growth of rationality.
What is the big picture for Bitcoin?
As contradictory as it may sound, the Bitcoin outlook is unpredictable but promising. To reach this conclusion, no complex calculations are necessary. It is a reality that fiat currency is losing credibility to Bitcoin. The financial measures taken during the worst of the COVID-19 pandemic in the United States produced a rebound effect on the dollar. The world's most trusted currency is showing inflationary rates comparable to the oil crisis in the 1980s. Specialists in the subject argue that BTC will be an economic refugee. The professor of the University of Seville, in Spain, Ismael Santiago, considers that 2022 will be a year of growth for Bitcoin. The expert's calculations show that it is likely to reach a price of $70,000 to $130,000 this year. It is for this reason that you should take the opportunity to invest with a reliable and secure method. Acquiring your cryptocurrencies through a reliable platform generates a symptom of credibility, trust and security, which delegates price volatility to the background. Changelly guarantees that you will get the requested amount despite market fluctuations, you can convert BTC to BNB on Changelly right now.
Bullish and bearish trends in buying digital assets If you still want to invest, you should know certain indicators that can help you narrow it down. The only thing that can give a clue about the best time to buy immediate edge is the study of trending behaviors: Low volatility: for the co-founder of Data Trek Research, Nicholas Colas, volatility is a relevant signal to buy. When price variability decreases is the right time to buy BTC. This way you can be more confident that a sudden trend will decrease your crypto capital.
Measuring volatility: how do you know if volatility is low?
Colas states that you should check the quotes of the last 100 days. The reliable volatility range to buy has to be between 1 and 3%. If it exceeds that percentage, the right decision is to sell. Market volume: it is the number of transactions executed in a period of time. If in the last 30 to 90 days the market had a large volume accompanied by upward trends, it is not the time to buy. The reason is that at any moment the price starts to fall. The ideal is to wait for price stabilization and few trades. Conclusion The cryptocurrency market is four to five times more volatile than the stock market. The fluctuation dynamics is aggressive because it is dominated by users' emotions. Moreover, it has become a greedy medium in that it has the conditions to generate wealth in the short term. Consequently, it is a high-risk investment. Despite experience and study, it is impossible to predict trends unequivocally. But, even so, cryptocurrencies have functioned as a support arm to the current decadent economy.
