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Determine realistic price objectives in the crypt ‘trade
The world of cryptocurrencies is known for its high level of risk and volatility. As prices fluctuate rapidly, it can be difficult to predict the future value of a particular currency or property. To make informed investment decisions, it is necessary to have a solid understanding of how to establish realistic price objectives in the crypt ‘trade.
Understand the price movement
In criptomas markets, prices are determined according to supply and demand forces. If the demand for a particular currency is high, its price tends to increase, while when the offer is abundant, its price can decrease. However, this does not mean that the price always rises indefinitely. Crypt merchants must understand the basic market dynamics and predict potential price corrections.
Factors that affect the price objectives
Several factors can affect the price objective of cryptomena that include:
1.
- Market feeling : The total feeling of the market to a particular currency can affect its prices. Positive feeling can increase prices, while negative feeling can lead to repairs.
- Competitive country : The presence of other currencies or assets with similar characteristics can affect the demand and supply of a particular cryptocurrency.
- Regulatory environment : Government regulations and policies can significantly influence the acceptance and price of cryptocurrencies.
Establish realistic price prices
If you want to establish realistic price objectives in the crypt trade, it is necessary to consider these factors and follow a structured approach:
1.
- Analyze coins characteristics : Understand the unique characteristics of each cryptocurrency, including its technology stack, use cases and development equipment.
- Determine the market ceiling : Calculate the total value of all currencies in circulation to determine the basic value of potential prices.
- Consider the factors on the offer side : take into account factors such as the number of available currencies, the difficulty of mining and possible supply restrictions.
- Exclude risk management strategy : Create a risk management plan that balances potential gains with potential losses.
Example of the stage: configure a price objective
Consider an example of a scenario in which we buy a specific cryptocurrency in January 2022. We have identified the following factors:
- Trending trend: The market is usually a bull and prices increase over time.
- Coinic characteristics: Our chiptomoneda chosen has a solid development team and a growing user base.
- Market lock: At the beginning of the year, the total value of the chosen currency was approximately $ 100 million.
Assuming that we are buying 10% of this market (which may not be realistic due to liquidity restrictions), we can estimate the price objective:
- This includes the lower limit configuration based on potential losses and the upper limit based on potential gains.
- Use technical indicators : We will use technical indicators such as sliding diameters, RSI and Bollinger bands to identify potential price objectives.
3
Calculating the price objective
Using our example of the stage:
- Lower limit: 20% below $ 100 million (that is, J. 80 million dollars) = $ 40 million
- Upper limit: 15% more than $ 100 million (that is, J.