The cryptocurrency market is one of the wildest and most bizarre there is. It is also one of the most misunderstood. This is why even experts in the field constantly get predictions wrong and anyone who can tell you where crypto will be one, three, or ten years from now is lying.
This doesn’t mean that crypto markets are completely undecipherable, however. Learning what cryptos are and aren’t is a good start. Learning about historical patterns, the cryptocurrency market as a whole, and the forces that influence it also helps. Let’s take a look at how you can make better sense of cryptocurrency markets.
Know the Top Players
The very first thing you have to know is the top currencies in the game. There are a handful of coins out there that will be a representation of what’s happening on the market. Anything that happens with these top coins is likely to happen to the rest of the coins in the same category.
Right now, the two coins that can give you the best indication of the state of the market are Bitcoin and Ethereum. If Bitcoin is up, then it means that other transactional coins will be up, but also that some major event may be having an effect on the markets. This event may only affect coins like Bitcoin, however, which is why you need to counter verify with a platform-based coin like Ethereum.
Understand the Difference Between Coins
Knowing the different types of coins out there is very important. For instance, you might be asking yourself why Bitcoin would be going through the roof while a coin like XRP or Tether is going in a different direction or not moving at all.
That’s because XRP and Tether are different from Bitcoin at their core. XRP, for instance, was created to work with legacy systems, not against them. So, anything that favors decentralization may benefit Bitcoin, but not XRP.
Coins like Tether, on the other hand, are meant to be stable so they can allow people easy access to crypto markets without being affected by their volatility. These are referred to as stablecoins and are usually algorithmically pegged to an underlying stable asset like the US dollar. So don’t expect investment in Tether to get you any profits in the future. Learn how you can diversify by investing in different coin types.
Get News from as Many Sources as You Can
One thing about cryptocurrency markets is that it can be difficult to know how you can trust them. A lot of people who advise on crypto online are personally invested and prefer to be positive instead of being realistic. The mainstream media has agendas and will often try to downplay cryptos in favor of legacy solutions.
So, we suggest you gather information from a variety of mainstream and independent sources. Cryptocurrency newsletters are a great option. You can also go on major sites such as CoinDesk and CoinTelegraph and check out a few reputable YouTube channels.
We understand that crypto markets might seem like a nightmare at first glance, but, once you learn the basics, things become less murky. The most important part is to always be open to learning and think twice before making any move.