The trend line is one of the basics that we need to know. It is very easy to know even if we do not know actual terms and the flow of charts. Just by looking into the chart, you could know that currently it is rising trend, or The fact that everyone knows that the chart is ignorant is whether the trend of current coin price is rising or falling. This trend is deeply related to the investor’s overall physiology. Therefore, if you can’t answer the current trend yourself, that could be not the perfect time to invest and it’s better to search for other investment points.
The main point of trend line is that you should not try to violate the trend. When the value of the coin is fluctuating constantly without big movements, and if you are investing to earn at both long and short term, I could say you are too greedy. You are violating the trend in this case, and if you fix this bad habit, you will see a noticeable increase in your profit. Usually, you will see short term sometimes have unreasonable fluctuation on coins therefore, cryptocurrencies will perform their best in the long term with the most considerable profit.
Earlier in the year, Ripple went on a short-term bull run due to investors speculating on its future value, but the price has dramatically fallen from a peak of $0.43 on March 17th to price of $0.15 present price. The price has fallen over 65% and it is still falling. While other coins have dropped and rose back, Ethereum, and Ripple is still in a downtrend having some questions over its fundamentals.
The market and specific price movements in the short term can appear irrational but they usually act rational in long term. This is also why most of the successful investments are made through medium to long term. There are a lot of people willing to buy at particular range of prices, and there are also bunch of people willing to sell at the same range of prices. When there is more demand to buy, the price tends to go up, and when there is more supply of sellers, the price tends to go down. The pricing is based on what is called knowns and unknowns. The knowns include speculation, history, future expectations, news, and rumours. The unknowns are unknown, just as it is called.
Rumors are one of an important factor as the market price tends to move with the rumors through the demand and supply mechanism. For example, Litecoin was rumored to add SegWit to their source code, and the price jumped. As soon as the official announcement of lock in, the price dropped back and continued to fall for over a month. In such scenarios you will see a amateur investors complaining why the price has not risen. The reason is that the rumor was priced before amateur traders realizes and where professional traders are one step ahead of them.
You also need to know about the whales. If you don’t know about whales, they are the big money investors who can influence or manipulate the market with the capital.
In summary, investing in coin as long-term performs comparatively better, because short term acts irrationally in the market. There are a loads of things going on, influenced by knowns and unknowns. Crypto market is very volatile, therefore it is important for you to find a perfect entry point while invest in a coin.
This is where trend lines can be useful, where both the short and long-term prices can be predictable through the trend lines. As you increase your skills, you will also come through and learn specific price patterns such as Elliott Waves and Fibonacci Retracements.