Bitcoin has been making incredible moves in the past month or so. I was watching a video on a Bitcoin mining facility in China. The owner doesn’t sell any of his Bitcoins because he believes it will go to $1 million per coin. A year ago I would of never expected it to get to $7000+ which is what happened last week. Will their prediction of $1 million happen in the future? Here are some things to keep in mind when you are investing in Bitcoin.
Nothing Goes Straight Up Forever
If you’re any kind of investor, you know that no investment will go straight up, or even stay in an uptrend forever. Bitcoin has been in an incredible uptrend for the past 12 months or so. A year ago it was trading at under $1000. Now it is over $7000. A correction, possibly a large one, is inevitable. Just like a runner, cryptocurrencies need to rest and cannot sprint forever. No one knows when the correction will come, but don’t be surprised if one comes over the next year or so. Don’t let the fear of missing out cause you to chase Bitcoin after it makes a huge move. Patience is needed to find the best entry, it is best to wait for a period of consolidation before entering.
It Won’t Happen Overnight
Bitcoin will not just go to 1 million overnight. It’s very unlikely that it will go up another 1000ish percent over the next year, let alone get to 1 million anytime soon. For any investment, short or long term, you need to have a rough time horizon of when you expect it to hit your target price. You have to be realistic with your price targets. Otherwise you risk having a huge unrealized gain without taking profits, and then evaporate quickly. As a swing or day trader, you want to be buying when everyone wants to sell. and sell when everyone is chasing strength.
There Are Other Great Cryptocurrencies Besides Bitcoin?
Bitcoin is not the only cryptocurrency in existence. Altcoins like Ethereum and Litecoin have incredible potential, and offer features that Bitcoin doesn’t. Litecoin’s block production speed is four times faster than Bitcoin’s, and Ethereum has numerous applications outside of cryptocurrencies. These have made some incredible gains in the past year as well, and offer plenty of trading opportunities on a weekly basis. For tips on how to trade these with the momentum of Bitcoin, check out this article.
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