Can you figure out if a certain cryptocurrency is about to rise, so you can buy it right before its price increase?
Before we can answer this question, you must first understand how the crypto market works. You surely know that in any market, the prices can evolve according to supply and demand. The same principle applies to cryptocurrencies.
I am not getting into technical details such as studying charts and using trading indicators, because I am not an expert in such things. I am just telling you what I learned from my own experience, what matters when it comes to anticipating the next big move for a particular coin.
Here are 3 potential signs that the probability for a coin to pump soon is high:
1. Increasing Transactions Volume
The first thing to know is the reason for which a certain coin’s price is rising. The more people buy a coin, the more the price can rise if the number of buyers is greater than the number of sellers.
Sometimes the hype is created around the rise and the publicity that is generated will invite even more people to join the train, especially because of the fear of missing out (FOMO).
The more people know about a coin and they get involved, the more the volume of transactions grows, meaning that more people are buying or selling the coin than before.
2. Something Good in The News
The positive news is always a reason for a pump to follow. This could be a new listing on a popular exchange, new partnerships for the company behind the coin, the development of new modules and apps, or other positive news, including generally good news involving Bitcoin, which is the driving cryptocurrency of all the others.
Many times good news are just anticipated, like for instance, when a listing on a popular exchange is promised for a certain date in the future. This can also create hype and drive the price up even weeks before the listing happens.
3. Consecutive Rises & Pullbacks
After a cryptocurrency rises suddenly, then has a steady decrease and another cycle of this type repeats, there is a chance that a bigger rise is coming, which will also have its larger pullback, but this time you are in for bigger gains.
A few consecutive rises at a similar level translate as a few attempts for the coin to break a new all-time high, or the upper resistance price and could be followed by the breaking of this resistance.
After each consecutive rise, there is a pullback, but this is normal because it is part of the coin’s consolidation process. It cannot rise forever. There have to be pullbacks after each rise, as they are good for the coin’s stability.
If you are dealing with cryptocurrencies, remember that there is always a risk involved, no matter how precise you can anticipate a bullish behavior.