There are a lot of new comers to the cryptocurrency market. Many people saw the insane jump in BTC value at the end of 2017 and wanted to get in on the hype. Now everyone is in a panic because Bitcoin is currently worth $10,300 at the time of this article. There is no need to panic, folks! The crypto-world is a very volatile world that fluctuates all the time. But there are patterns to look for. The market seems to repeat these patterns every year. Let's take a look at some charts, rewinding back to January 2015.
As you can see, BTC was valued at $320 at the turn of the new year. But then suddenly dropped by nearly half within the first 14 days of the month. Everyone was in a panic then, "OMG, I've lost so much money!" - "How much further will it drop?!" - "I should sell now and cut my losses!". Wrong! You never sell on the dip. Remember, investing 101... You only lose money when you sell! That panic lead to a lot of people selling when they SHOULD have been buying into the dip. Notice that it was back up to almost it's original value by the 26th, 2015? Everyone who bought at the dip saw that, then sold at the peak on the 26th. Which caused another huge correction drop before leveling out, and slowly building up value. Let's fast forward to 2016
The candlestick wick hit $465 on Jan 7th, 2016. Not that much higher than the 2015 peak. But those that bought when it hit $170 on the 2016 correction and held, now have almost a 3x gain. Now notice it drops again, all the way down to $350. Not as big of a drop as 2015, but still an early January drop, then climb a few days later, only to drop again. By Feb 21st, it was almost back to it's original value at the beginning of the year. Followed by another tiny correction, only to start climbing again throughout the year. And now let's fast forward to January, 2017!
Now we're making some progress. People are starting to learn more about Bitcoin, more and more people are getting involved in crypto-currencies. BTC is up to $1,150 January 4th! Those that bought at the 2015 dip and held on 2 years are now seeing 9x gains! But notice, 7 days later, BTC drops hard again. Down to $750 on the 12th, but what's this? It starts climbing again throughout the year. Starting to notice a pattern here? Seems every year, mid-January the market crashes. everything goes down. But by February, it's all back up close to where it was originally, and then continues climbing even more. Let's break down 2017 a little further. Fast-forwarding to March, 2017
BTC's candle wick hits $1,350 on March 10th, nearly double what the dip was earlier that year. But then hits a steadily decline all the way down to $900 on March 25th. Of course it didn't stay there long before quickly rising back and steadily climbing further and further. Now to fast forward a couple more months to the end of May beginning of June.
The market is all over the place here. Up and down, up and down. If you were a swing trader, and were able to recognize the patterns. You probably made a fortune during this time. This is what everyone refers to as, the Bitcoin Roller Coaster. Ups and downs.
As I said earlier, this is a very volatile market. It is always changing. And that's not a bad thing. If you know what to look for, and buy on the dips, sell on the peaks, you can make a lot of money in a short period of time. Just don't panic and sell when it starts to drop. The patterns show it ALWAYS bounces back, and it ALWAYS climbs higher than before over time. Let's jump forward a month, to mid-July
Another big correction. BTC at $2,600 on July 4th, dropping down to $1,850 on the 17th, then suddenly climbing all the way up to $2,900. Again, those that bought on that dip and sold on that peak made decent profit. Little did anyone know how insanely high BTC was about to climb. But regardless, the pattern remains. BTC falls, but always climbs back to new heights. We're almost finished with this adventure through the trends. Only a couple more examples to show. Let's head to Sept, 2017. Right before BTC took off to the moon.
September 2nd, 2017 - BTC is a worth a massive $5,000! No one ever expected it to get that high. There were many parties and celebrations that night. And since no one expected it to ever reach that, people began to sell out of it. Take those massive profits. Millionaires were made that night. And with all that selling, we see a steady decline in value, all the way down to $3,000 by the 15th. After having witnessed the $5,000 peak, and knowing the patterns of the market. People took advantage of the $2,000 decrease and invested right back in with the profits they had made from that huge $5,000 peak. And so we see the value jump $1,000 over night. And finally, where we're currently at. The present time, let's take a look.
BTC hit almost $20k in November, but at the beginning of 2018, was at a MASSSIVVEEE $17,200! Think about those that bought that $170 dip in 2015, and held out until now. 100x gains, that's insane! But that's how this market is. If you play smart, and don't panic sell, don't buy into the FUD. You can make a ton of money. But back to the chart, notice anything? Maybe something we've seen every January since BTC became known and accepted? Yup, we notice a pattern, a large dip by mid-January. Followed by a small climb back, then another small dip to where we are at the time of this article.
So if you follow the patterns of the years prior, you already know that it's going to rebound, it's going to start climbing, and it's going to hit new heights. Many analysis are suggesting BTC will hit $30,000 by the end of this year. That would be crazy. Crazy in a good way. So what are my suggestions? My suggestion is to by now, by while everything is way down in value. And hold. If you're buying into the major name coins, you should be good. But you're investing into smaller altcoins, always do your own research. Never let someone else tell you what to invest in. Go to coinmarketcap.com and look up the coin. Check it's market cap and volume. Low market cap with decent circulating volume is a good sign that if it grows, it will grow big. Check the website, read over it. Does the coin look legitimate? Do they have a good solution to an existing problem? How does the team look? Any reputable members or advisers? What about the road map? Do they have a good plan for future implementation? And read over the white paper. Learn exactly what the blockchain is about, what they're doing, where they came from, etc etc. Check their social media outlets. How often do they post updates on the progress? Do they interact with investors and followers? And finally, how will their coin/token be used? What is it good for? If you do all that research and still believe it's a good investment, then buy into the blockchain. If you do that much research and still have little to no doubt on if it will be successful, invest.
** Disclaimer, I am not a financial adviser, this is just what I do when investing and what I look for in a blockchain before buying into it. There is always risk when investing, do so at your own discretion!
Affiliate links for those looking to start investing:
Coinbase - Convert USD to BTC, ETH or LTC
Binance - The largest, US based exchange. Where you use BTC/ETH to buy altcoins
Bitstamp.net - Your secure wallet to store investments that you're not actively trading