Everyone wants to know when is the best time to buy Bitcoin and cryptocurrency. Rightly so, you want to make a profit and get the most bang for your buck. It’s all about buying low and selling high – that’s what most say. However, it’s often very hard to predict the market and nearly impossible to time it perfectly.
The fact is that it’s nearly impossible to say when is the absolute best time to buy cryptocurrency. It’s all about perspective. The best time could have been when BTC with $1 or ETH was $3.
Where’s a time machine when you need one?
This got me thinking about all the lessons I’ve learned during this year with investing and trying to time the market. I thought I would share them with you.
Please realize that as always, this is not financial advice, just my opinion and that I don’t proclaim to know everything when it comes to investing in crypto.
Lessons learned in timing the market – when to buy?
Technical analysis matters and can save you a lot of time, money and heartache
I was never big on technical analysis. Maybe I didn’t have enough time to properly learn it or maybe I was just lazy. Actually, I’ve been finding it more and more interesting these past few months.
Technical analysis isn’t a crystal ball into the future. My way of seeing it is that you project/speculate on different scenarios that can happen in the market and the probability thereof.
For a completely new investor, it’s hard to wrap your head around it, but it can save you tons of money, time, hassle, loss and lead to a lot of profit.
If you really don’t have the time to learn this skill, look into joining groups or following YouTubers that provide quality technical analysis. Many YouTubers try, but more than often their technical analysis skills are weak and they don’t know much.
Leveraging someone that knows technical analysis and is an investor themselves will go a long way in helping you. I would recommend Alessio Rastani, Traveling Crypto (he’s also got a VIP group where he shares trade alerts) and check out Twitter.
If you don’t have the expertise or knowledge align yourself with those that do
This is in line with my previous point. While someone can teach and guide you with technical analysis and you can get an idea of potential market scenarios, someone can also share their expertise with you.
This can be from a development, fundamental, news or just investment perspective. Many people who are investing in crypto do so for the very first time. It might even be their first investment ever.
You need to learn skills like dollar cost averaging, not keeping all your eggs in one basket, why to invest in projects/why not and much more.
This post where I mention a bunch of YouTubers I follow is a great place to start and build up knowledge.
Don’t fomo – Buy when there is red
FOMO = Fear of missing out.
Sure there were times when you might have bought into a coin that was pumping and made some profit, but it’s like gambling or blindly investing. This is especially true when you don’t know the technical charts say or have an idea of key support levels and what could happen.
It’s so easy getting caught up in price action when everything is just green on Coin Market Cap. It feels like prices are going to the moon. More than often they do not and there comes a price correction.
When it’s green and prices are up, don’t buy. When everything is down and Coin Market Cap is full of red, that’s when you buy low and can often quickly make a profit.
BTC and altcoins are connected
It’s crazy how altcoins are connected to Bitcoin. When BTC goes up, alts rally, when it goes down, prices plummet. Sure, there are situations when this does not exactly work as mentioned, but more than often it’s the way it goes.
It can often create opportunities for short-term swing trades or making some quick profits.
Coinbase and Binance exchange listings can lead to pumps
In the past news would move markets a lot in terms of price. These days I feel we are getting mixed results. However, more than often when there is an announcement of a coin being listed on a major exchange like Coinbase or Binance there is a pump in the price.
Many times the price pumps when news gets released before the listing and then sells off once listed. It could pump further, but there tends to be a sell-off sooner or later.
Just something to keep in mind.
Day trading isn’t easy
The more coins you have the harder it is to monitor them all and the more time you need. This is especially true when you are day trading. I don’t day trade and definitely, don’t have enough time or skills to do it.
All I can say is that I’ve tried it and it’s almost driven me crazy. If you start messing with leverage trading you better know what you are doing or futures since you can get rekkt easily.
Have a plan
Have a plan and stick with it even if the market goes down or up and know what you are willing to invest/lose. This helps when there are huge corrections like we had this whole year.
Know the techniques available to limit your risk like moving funds into stable coins, invest in quality projects – basically all tips mentioned above and many more.
Understanding the fundamentals and knowing why you are invested in a coin in the first place will go a long way at setting your mind at ease when there are huge market corrections.
These are some great tips to follow:
Don’t get too attached
That being said, projects don’t always deliver as promised. Don’t get too attached to a project that it blinds you. If the project is failing on every front, not just price in a bear market, but development and management, maybe it’s time to let it go.
Dollar cost averaging
Timing your entry points into the market is very hard. One day prices can be down and the next day it could be down even further. It’s crypto, basically, anything is possible in this small unregulated market.
If you dollar cost average buys a coin every week, month and whichever time frame you choose, you will get an average price. Learn more about that here.
I’ve mentioned stable coins above, but using them effectively isn’t always easy. You need some technical analysis knowledge or else you can even end up losing money. However, they are great at limiting risk and even if you’ve timed the market incorrectly, you can protect your initial capital from declining in value.
Read more about that here.
As I said, I’m by far not an expert. These are only a few lessons I learned and I could even be wrong about some of them. I might even need to adjust them a few months from now.
Just take note and make your own assumptions. This will get your mind thinking and help you with your own investment journey. If you’ve been in this crypto market long enough I’m sure you’ll be able to relate to my tips.
At the very least, it can help you figure out the best time to buy Bitcoin or crypto. Okay, maybe not really the best, but at least, better than before.