5 Important Steps to Choosing a Cryptocurrency Before Making an Investment Decision - GREAT MONETIZE

5 Important Steps to Choosing a Cryptocurrency Before Making an Investment Decision - GREAT MONETIZE 

Investment in Cryptocurrencies

Hello everyone all GREAT MONETIZE website today present for you 5 important steps you must choosing before investment in Cryptocurrency. 

Cryptocurrencies are divided into two main types: deflationary or inflationary.

The cryptocurrency market is volatile, and more crypto assets often appear every week. This is why research and study are so important when choosing crypto assets to invest in.

 And unlike investing in stocks of companies listed on the stock market, there are no structured research reports that quantify profits, losses, revenues, and cash flows. So cryptocurrency investors should tread carefully, do their research in other aspects, and be wary of what could move the market. Here are five things that can help with that.

 1. Understanding Technotics and Supply

 Tokenomics means understanding the supply and demand characteristics of a cryptocurrency, which stands for the economics of tokens.

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 One of the reasons Bitcoin is so popular is the limited supply, with a maximum of 21 million bitcoins available for the coin, which means that with enough demand, the price should theoretically go up over time. Therefore it is referred to as deflationary.

 And the question should be applied when looking at other crypto assets. Does cryptocurrency have a limited supply, or is its supply potentially unlimited?

 Some major crypto assets, such as Ethereum, Solana, Polkadot, and Dogecoin, have an unlimited supply. If demand lags supply, their prices will theoretically fall in the long run, so they are considered inflationary.

Note that several factors complicate this picture. First, many cryptocurrencies are designed to have a controlled inflation rate, with Solana and Polkadot pegged at 8% and 10%, respectively.

 Similarly, some cryptocurrencies - such as Ethereum - burn a portion of the fees paid to “miners” who are responsible for verifying their transactions, and this removes Ethereum from circulation. So even though these cryptocurrencies are inflationary in theory, they can be non-inflationary or even deflationary in practice.

Bitcoin investment

 2. Look at what encryption does and who uses it?

 Obviously, it is important to look at what cryptocurrency does and what platforms or applications are associated with it. Are these useful, trustworthy, and do they have the potential to succeed?

 Cryptocurrencies that do not meet any of these three criteria can often rise in value, but their support is speculation rather than investment, and they can be highly volatile and collapse as quickly as they are rising.

 It is also important to check if a crypto system or the blockchain platform you belong to is actually being used. There are different ways to do this.

 User numbers

 With crypto assets like Bitcoin, Litecoin, Dogecoin and Bitcoin Cash, one good indicator of usage is the number of active users.

 You can search for this at a site like BitInfoCharts com.

 Aside from users, some cryptocurrency groups are also connected to a platform - whether it's a blockchain-based video game or a crypto exchange - that has actual users. It is highly recommended that you check data on the number of users, where available, to see how the platform is being used and whether it is growing

Total reserved value

 For crypto-assets containing general-purpose blockchains such as Ethereum and Solana, the “total value confined” provides key insight into their validity.

 This number measures the value of assets stored by applications running on a particular blockchain.

 3. Learn more about crypto assets from trusted sources

 It is not difficult to find people with an opinion on cryptocurrencies, and in the world of cryptocurrency investing and trading, there are many competing voices. But who is the person whose thoughts you read, listen to, or watch, and can you trust them?

 4. Look at technical indicators such as the RSI and moving averages

 Relying too much on charts can be risky, just because past patterns do not guarantee future patterns.

 However, there are at least some technical indicators that indicate a higher possibility that the price of the crypto asset may move in a certain direction.

 One such indicator is the Relative Strength Index (RSI), which is calculated using the average of price gains and losses over a given period of time. It is presented as a number between 0 and 100, with 0 indicating oversold and 100 indicating overbought.

 Basically, the RSI suggests a good time to buy or sell a cryptocurrency: if the number is above 70, it may not be a good time to buy. Conversely, if it is below 30, it may be a good time to buy, given that the asset in question will be at a discount and may be about to rise again.

Moving averages, such as the RSI, indicate momentum.

 The most watched moving average is the 200-day line, if the price of the asset is higher than this, the market is seen as bullish, and if the price is below this line, it is considered bearish, as breaches of this line are closely watched.

 It may also be useful to compare the short-term moving average of the cryptocurrency to its long-term average.

 Some investors consider it important when the 50-day average of an asset rises above the 200-day average. This is known as the 'golden cross', and it may signal the start of a new rally.

Cryptocurrencies exchange

 5. Where can crypto assets be bought and traded?

 It is important to know where to trade crypto assets before buying them. This is not only for obvious practical reasons, but because answering this question provides important insight into the depth and quality of the asset market.

 If cryptocurrencies are traded on only one or two of the lesser-known exchanges, it may not be a safe investment. With such a small market and little liquidity, it is likely to become more susceptible to price manipulation by a few large traders.

 Meanwhile, if cryptocurrency can only be purchased through unusual places, it may be a scam.

 So it is best to ensure that crypto assets are listed on a variety of well-known regulated platforms or platforms. This provides a greater opportunity for its market to be liquid and not subject to manipulation of any kind.

What is Cryptocurrencies