Every trader and investor knows that having a deep understanding of the market they’re entering is a prerequisite for making successful trades. This understanding refers not only to the specific assets that are being traded but also to the factors and trends that shape the market and dictate its evolution. Conditions change all the time, so staying up to speed with these changes allows one to make well-informed decisions, manage risks more effectively, and refine and adapt their strategies to current realities so they can increase the probability of achieving the desired outcomes.
This principle applies to all financial markets, but particularly to those that are known for experiencing rapid shifts. And no asset class is more chaotic, volatile, and fast-moving than crypto. You can gain a sense of how quickly things move in the crypto space just by reading the crypto news today, and the pace of change only seems to intensify with time, as the industry keeps expanding. Marked by a never-ending stream of new projects, innovations, high-profile legal disputes, and regulatory developments, the crypto sector can only be described as hectic.
On the one hand, there’s significantly more data available and plenty of educational resources that can help the public decipher the crypto market and start trading with confidence. On the other hand, the influx of information is so vast and complex that trying to sift through the data and process it can easily get overwhelming, especially if you’re a beginner.
So, in what follows, we’re going to talk about how you can keep up with the latest in crypto and gain a competitive edge without having to spend every waking minute checking prices, obsessing over charts and trends, and gradually losing your sanity.
Focus on key market indicators
There are tons of technical indicators that can offer valuable insights into different aspects of the crypto market, such as volume, volatility, support/resistance zones, momentum, trend direction, and so on, but you don’t have to look into every single one to gain an idea of the market’s current standing and future prospects. It’s enough to focus on the most relevant ones for that.
According to experts, there are five key indicators every investor should take into account when stepping into the cryptocurrency market. These indicators are specific to the crypto space and can reveal instant signals and accurate data about the market in real time, something that investors cannot access when trading other types of assets. This is made possible by the blockchain technology, which forms the technical backbone of the crypto environment, and allows everyone to view the transactions it facilitates and records.
Therefore, on-chain indicators serve as a goldmine of information for investors, making it much easier for them to take the pulse of the market. The most important ones are as follows:
New addresses
Each crypto user needs a wallet to store and manage their coins. These wallets are tied to specific addresses on the blockchain. The creation of a large number of new addresses on a blockchain platform usually indicates there’s a high demand for the crypto assets it holds, which could result in a significant price increase.
Exchange inflows and outflows
Most crypto trading takes place on centralized and decentralized exchanges. Tracking the inflows and outflows that these platforms register can show whether investors are selling off their assets (high inflows), which is generally a bearish signal, or moving them into cold storage (high outflows), indicating a potentially bullish trend.
Whale activity
In crypto lingo, whales are entities that hold large amounts of a certain digital currency. When whales make a move, selling or transferring their holdings, they can influence the price of the coins they possess, causing it to rise or drop, and the trajectory of the crypto market, so keeping an eye on what whales are doing is always a smart thing to do.
Reactivation of dormant wallet
A lot of wallets show no signs of activity for long periods of time, so when they are reactivated, their moves are bound to draw attention from market participants, especially if the wallets in question have large holdings. They can send either bearish or bullish signals, depending on what they decide to do with their assets.
Only consult reliable sources
These days, everyone seems to be a crypto expert. However, reading a few articles about crypto or making a few successful trades, which can happen by sheer luck, hardly qualifies one as a specialist.
When looking to deepen and update your crypto knowledge and education, you should always resort to reliable sources. Only read news from reputable media outlets that are known for offering accurate reports, and avoid listening to rumours and speculations that could give you a serious case of FOMO. When it comes to more in-depth insights, rely on the analysis of trusted industry experts. Also, keep in mind that even experts can fail in their assessments and predictions, so don’t trust anyone blindly.
Take breaks
As counterintuitive as it may sound, you don’t have to be connected to the market 24/7 to stay in the know. A lot of traders and investors think they cannot afford to take a break or close their eyes for one second because they might miss out on something important. However, by doing that, they may reach a point where they exhaust themselves and can’t see the forest for the trees anymore.
Obviously, this doesn’t mean you should completely disappear from the picture for extended periods to avoid these situations. But pressing pause every now and then and taking a step back from all that’s happening in the crypto sphere, which is a lot, will allow you to see things more clearly when you come back.
Final thoughts
It’s certainly not easy to remain in the loop and stay on top of the crypto market, given its rapid development and all the hustle and bustle it’s known for. But you can tune out the noise by knowing where to look for information and learning to focus on what truly matters.
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