Category Archives: Cryptocurrency

Mistakes usually made by new crypto traders

Crypto trading is usually just the same as stock market. However, there are just a few differences that one can be able to point out between the two. For instance. The volatility when it comes to cryptocurrency is way high and runs throughout the day.

With crypto trading, you don’t have to worry about the closing hours of the market. As said before, this runs all day thus you can be able to trade at any time of the day. Anyway, with the cost of living going up, people won’t hesitate to find other ways in which they can make ends meet and joining the crypto trading world can provide a way out.

However, even by using greatly designed trading bots like the Bitcoin Code software, people still make mistakes during their early days in trading and that’s what the article will be discussing today.

Since, everyone is always born without any knowledge of something, it is only natural that you are bound to make a couple of mistakes during your first days dealing with something new. For that reason therefore, let us look at some of the mistakes the people always make when starting out on crypto trading.

  1. Failing to do your own research

You know you will be using your own money, right? Which of course you are not getting any easily. You will be putting yourself at risk if you don’t know or understand the value of the product or even the product itself.

This will force you to depend on someone to help you make your trading decisions. Doing your own research will enable you to know more about the product and what’s happening in the market, making you to be able to make rich decisions depending on the information you have gathered.

Continuous dependency on people is quite dangerous and can lead to you, losing your investments.

  1. Mining with huge expectations

Well, those who were first to mine Bitcoin and other cryptos are definitely rich by now, good for them. But this should not tempt you to also start mining.

You can, since it one of the ways you can acquire them, but it is not worth it. First, you will need to buy your own mining machine and also pay for the power that you will be using which in this case is way too much.

Again, if you get to do all of these without no proper research on how to go about it, you will be putting yourself in a big trouble.

  1. Patience

I don’t think whoever came up with the phrase “patience is a virtue” was wrong and it is something that most people don’t have.

It is quite unfortunate that people nowadays are looking for ways in which they can get some quick money. Well, if you are this kind of guy, then perhaps the crypto world has no place for you.

Whether you are aiming for the short term or the long term profits, you need to have a plan and make sure you stick by it. For you to pull this off, you are definitely going to need some patience.

  1. Failing to hold their private keys

This is one of the biggest mistakes that a lot of people always make as beginners to the crypto trading business.

If you don’t have any idea of what a private key is, or even if you don’t have a clue regarding the type of crypto wallets that you should be using, you can click here to learn more on that.

Anyway, most traders have lost a lot of money simply because of a compromised exchange or due to a wallet service crushing. This is why it is important to always hold your private keys.

  1. Finding communities

If you are new to something, it is only natural that you would welcome any help you might get, especially if you are dealing with something a bit technical like the cryptos.

Anyway, if you are just starting out with cryptocurrency, some of the best places to find information, are the online communities. These communities are always available to help people with different issues concerning the crypto market.

All you need to do is join and participate actively before you start asking your own questions.

  1. Confusion with the crypto wallets

This is something that mostly occurs when a trader is in a hurry to make transactions. A lot of crypto traders have lost a lot of money due to this technical mistake that can simply be avoided.

You need to be extra keen when doing transactions. This means double-checking the other wallet where you are supposed to be sending your funds to. Proceed with the transaction if the wallet matches the token.

Don’t lose your crypto just because of a simple mistake that can easily be avoided, do not send ETH to a BTC wallet or the reverse. Always make sure you use the correct wallet.

  1. Failing to keep hard copies

Hard copies for who? I get it. Technology has since been improved and there are other ways to store data but not just hard copies. Well, in the crypto world, everything else counts as you never know what could happen the next minute.

All am saying is, it is very much important if you could just find somewhere and write down your important information including the passwords and your private keys, print them out and safely keep them.

This will help you a lot for when your computer crushes, gets compromised or even stolen, you can still be able to restore all your crypto on a new device.

  1. Using the 2 factor authentication

A lot of instances will arise where you will be forced to make necessary exchanges. But, this still is not enough reason for you not to use the 2 factor authentication if you can.

You can then save your restoration code safely somewhere offline. If you forget to save the restoration code, you will be forced to contact the customer care, which in some cases, you will not be so lucky to find.

So if you are going to use the 2 factor authentication, make sure you also remember to save the restoration code some place where you can easily find it.

  1. Fear of missing out (FOMO)

You remember that one time back in college or high school when your friends were rushing to do something just because most people are doing it? Well, this is just how FOMO works.

It leads you in to making haste decisions because you have fear that you are going to miss out. You shouldn’t let this get into you and you also need to realize that other opportunities are there eachand every day in the crypto market.

With just enough research you are just going to be fine.

Conclusion

These are just some mistakes that new traders often make as they struggle tofind their way around the crypto market. If you want to be on the same side, please do avoid the. I’m sure you’ve also noticed the emphasis made on how much you should do and depend on your own research. This could really help you out.

What is a bitcoin death cross and why everyone talks about it?

Cryptocurrencies are volatile currencies, and bitcoin is no exception. In 2017, Bitcoinwentthrough a period of rapid rise starting at $1000 in January and closing at $20,000 in December. In 2018, however, the cryptocurrency has fluctuated greatly, at one time plummeting to $5000.

Such volatility explains why so many people think these prices are a bubble and therefore not sustainable in the long run. Bitcoin’s downward trend is predicted to continue, hitting what stock investors often refer to as a Death cross. A death cross happens when the 50-day moving average (MA) crosses below the 200-day moving average.

Previous Bitcoin death crosses

Bitcoin has suffered three death crosses in the past.The first death cross was confirmed in April 2014 after bitcoin hit the floor at $340. Fortunately, this was short livedandits prices shot up to $680 by June 2014.

The second death cross took place in September 2014 and continued to drop for four months until January 2015 by which time it had fallen by 65% to $170. Soon after that, there was a gradual recovery.The other death cross was experienced in September 2015 when prices nosedived to $162. This did not last for long fortunately and the prices were able to pick despite the cross signal.

Consequences of a death cross

When a death cross is confirmed, the panic created causes either a major sell-off or a HODL (Hold On for Dear Life). The last three death crosses as explained above did not yield major sell-offs and it is likely that this is what caused the aversion to a total collapse situation.

Sometimes these are bear traps to make people sell off so that opportunistic investors can buy during this low price periods and sell off when the prices pick again.

To HODL would be a good strategy though risky. If indeed the death cross alarm is actually a bear trap, and the prices hit the floor and still continue to drop below the floor, then even the bear trap would trap would trap the bears who had bought the cheap bitcoins would be holding valueless assets that would have actually collapsed.

The most alarming scenario is that according to a Bloomberg article published in December 2017, it was revealed that 40% of all bitcoins in circulation are held by only 1000 people. Also, a minority, precisely 100 bitcoin address holders, have been reported to have control of 17.3% of all the supply of bitcoins.

What are the implications of this state of affairs? It simply means that if a few addresses decide to sell off their holdings, then an effectual crippling would have been concluded. It would only take a person or two with monstrous holdings to paralyze bitcoin by a sell-off.

Death Cross strategies to apply

Though it is understandably hard to maintain focus, it is better to HODL than sell off immediately. If history is anything to go by, a recovery no matter how long that may take, a death cross eventually makes a comeback.

It is advisable to view a death cross situation as you would winter. Despite how long a winter season may take, spring will ultimately arrive and eventually summer. The best shield is to use these periods to find out how to buy low and hold for a recovery. This should be the mindset of a HODLer.

The other strategy would be to explore other markets. Prudence dictates diversification which would create a fallback situation in case things get out of hand.

Why everyone talks about death cross

The decline in bitcoin prices has been the most severe in its history since 2011. It has lasted for three months already and who knows how much longer? It is then natural that people will talk. There are diverse views of this death cross situation currently doing rounds. Let us categories these views into two – the hopefuls and naysayers.

The hopefuls

They believe that the current situation is a bearish sentiment. This means that it is a created situation and can be corrected with market dynamics being set into play. The past crashes have always made a comeback. Here is a list of previous crashes:

  • 1 Lost 30% from January 12, 2012, to January 27, 2012
  • Lost 57% from August 17, 2012, to August 19, 2012
  • Lost 33% from March 6, 2013, to March 7, 2013
  • Lost 35% from March 21, 2013, to March 23, 2013
  • Lost 83% from April 10, 2013, to April 12, 2013
  • Lost 50% from November 19, 2013, to November 19, 2013
  • Lost 87% from November 30, 2013, to January 14, 2015
  • Lost 34% from March 10, 2017, to March 25, 2017
  • Lost 33% from May 25, 2017, to May 27, 2017
  • Lost 39% from June 12, 2017, to July 16, 2017
  • Lost 40% from September 2, 2017, to September 15, 2017
  • Lost 30% from November 8, 2017, to November 12, 2017
  • Lost 70% from December 17, 2017, to February 6, 2018

There is a general feeling that things are looking up and that the nosedive was a cooling off effect from the heat generated by the monstrous price shot. On 1st April 2018 the prices of bitcoin were at a low of $6,443 and the following day on 2nd April, it had strengthened by 2.6% to $6,990. This trend, though gradual is expected to hold ground and though a long way from the $20,000 in December 2017, it is not all doom. 

The Naysayers

With this particular death cross, there has been a breakdown of technical analysis which relies on the premise of market psychology that people are predictable in the way they conduct business. With a broken analysis system, there has been a general freaking out as people evade conducting business blindly.

This group of people wants to stick to hard facts to do with cash flow statements and the figures on the balance sheets.

Conclusion

In conclusion, death crosses are not only to be found in bitcoin trading but in all forms of asset trading in general. They make investors delirious and prone to emotional decision making. Whether the death cross will be survived or ultimately collapse, the ride has been a bumpy one with very awesome highs and catastrophic lows.