How to choose the right moment to sell cryptocurrency?

Almost immediately after purchasing a cryptocurrency, the investor is faced with the acute question of selling it. Whichthe moment to choose so as not to miscalculate and get ridfrom the asset at its peak, right before the start of the depreciation. It is possible to determine the correct time, but for this you need to dive deeply into the topic and have a certain amount of luck, writes RBC Crypto.

Unambiguous factors that will always promptthe moment of the sale, no, the financial analyst of the investment company Raison Asset Management Nikolay Klenov is sure. In the case of cryptocurrency, market indicators are interpreted ambiguously, and none of them can be considered in isolation. All fundamental and technical factors must be studied together.

The expert named one of the strongestfundamental factors, which can be interpreted unambiguously, legislative regulation. The news that large states (China, the European Union, the USA, etc.) are going to restrict the spread of cryptocurrencies can be regarded as a signal for sale.

Legislative prohibitions will inevitably be negativeaffect the rate of cryptocurrencies. However, today such news is unlikely: China is about to launch a digital yuan, the European Union is thinking about a digital euro, etc. Blockchain and digital currencies are gaining popularity.

“For private investors, in principle, I would notrecommended shorting cryptocurrencies: it is better to choose a long-term retention strategy. At the same time, the rate drawdown should be regarded as a good reason to buy at the lows and average the position ", - advised Klenov.

CEO of the EXMO exchange Sergei Zhdanov added that anya correction or change in trend is usually accompanied by a sequence of certain signs. Speaking about the analysis of exchange instruments directly, the specialist recommended analyzing in a complex: the coin chart, the order book and the tape - trading history.

Zhdanov explained how this might work using the example of an uptrend decay:

1. On the cryptocurrency chart, you need to determine forits significant levels. Most often, these are certain extremes that coincide with psychological levels of support and resistance, for example, for the BTC/USD pair, this can be a round price value: $10,000 or $12,000. A situation where the price has approached the resistance level several times may be indicative. but I couldn’t break through it.
2. If such a price level is identified, you cango to the order book and see the accumulation of orders with a large volume. If large orders are located at such a resistance level, then there is a possibility that large players plan to fix their positions at this level and, possibly, a reversal will follow. Such information should be confirmed by analysis of the stock exchange tape, since large players can easily cancel their orders when the price approaches their levels.
3. A price reversal or correction is confirmed by the presence of a large number of executed sell orders with a large volume in the tape. An additional signal is the growth of the trading volume at this level.

“The desire of major players to fix theirprofit is often accompanied by the creation of a certain "hype" around a certain topic on thematic resources, for example with DeFi. This is done in order to attract maximum attention from small traders and investors and eventually sell them their volume of cryptocurrency ", - concluded the expert.

The main influence on the cryptocurrency market islarge stake holders, the so-called "whales", therefore it is necessary to understand how they think and move with them, says Anton Kravchenko, CEO of Xena Financial Systems. According to him, much more attention is paid to the question of “when to buy” than to the question of “when to sell” precisely because “whales” buy when the price of bitcoin is close to or below the cost of mining and almost never sell, except for the situation in 2017. when the gap between the price of bitcoin ($ 19,000) and the cost of mining ($ 3,000) reached more than 500%.

“You need to sell if it goes down for somereasons, the cost of mining, and the price will remain unchanged (this is an unlikely event due to the structure of the miner market and the link to complexity). Or, if bitcoin quickly overcomes resistance without fundamental factors ", - recommended Kravchenko.

For example, if tomorrow Bitcoin rises sharplypriced up to $17,000 for no apparent reason, the expert recommended selling. Cryptocurrencies are a nascent market and should be slowly gained positions at understandable prices in order to sell during moments of euphoria. However, Bitcoin has already passed the first stages of its formation, which means that periods of mania and declines will be shorter and less pronounced, Kravchenko believes.

Analyst at IAC "Alpari" Vladislav Antonovwarned that traders, investors and analysts can make assumptions about the future movement of the price of an asset, based on different methods of market analysis. In this case, there is no guarantee that the price will move in the predicted direction.

There are technical indicators thatcertain rules and time frames (TF) generate trading signals to sell or buy cryptocurrency. For example, a trading system on an hourly timeframe, written on the MACD indicator. A signal to buy BTC/USD appeared, the user bought Bitcoin. 5 hours have passed and the price has not increased. One of the possible reasons for this is that on a 4-hour timeframe, the same trading system generated a signal to sell BTC. The older the TF, the longer the investor’s time horizon and the stronger the trading signal.

To understand how soon the fall will begin orgrowth, Antonov advised using graphical analysis (trend lines, various price formations, horizontal price levels of support and resistance, as well as “bullish” and “bearish” divergences). For accurate market entry, you can use indicator trading signals (MACD, RSI, Stochastic, etc.). But for this you need to understand what they show and how they are calculated, to know all the disadvantages and advantages of trend indicators and oscillators, the analyst concluded.

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