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The Top 3 Cryptocurrency Indicators for a Promising Outcoming

When Bitcoin was introduced in the year 2009, it’s value was barely a dollar. In July 2010, the pioneer cryptocurrency was worth $0.08. Assume you bought $10 worth of Bitcoins by then and forgot about them till December 2017.  You would have been approximately $2,375,000 richer.

Between December 2017 and December 2018, the value of Bitcoin experienced a market correction. Falling from an all-time high of approximately $19000 to $4233. Currently, various statistics are predicting either a surge or a plummet in Bitcoin’s value.

On July 2, 2017, a group of rogue investors decided to pump and dump the value of the altcoin SaluS (SLS). They successfully coordinated the pump and dump on Bittrex exchange. At the beginning of the pump, SaluS was worth $11.6 (0.0046 BTC by then). And by the end of the dump, the altcoin was worth $110 (0.438 BTC by then). Upon suffering a market correction, Salus value fell to $9.71 by December 2018.

Both of the above cases are promising outcomes. However, the latter was a scam, not easy to identify by many investors. So, what are the critical pointers of a crypto that will, in the long run, give positive returns:

  • Trading volumes

The trading volumes of a given cryptocurrency define its liquidity. A high trading volume indicates high liquidity while a low trading volume serves low liquidity. The former means it is easier to buy and sell a given cryptocurrency, hence great adaptation. On the other hand, tiny liquidity means an unpopular cryptocurrency, which can experience great plummets in value in the long run.

As an investor, always consider the trading volume of a given cryptocurrency before investing. Avoid conspicuously low traded virtual currencies, especially if they do not have a well-defined purpose like the case mentioned earlier on. Be specially keen on pump and dump cases, which are shortlived and difficult to identify at first sight.

  • The purpose of the cryptocurrency

There are two types of cryptocurrencies. Currency-type cryptos and business-type cryptos. The former are invented to replace the traditional currencies. The latter, on the other hand, solve specific shortcomings within a given industry.

You can buy and sell goods and services using currency-type cryptos. Additionally, you can predict any events such as sports on platforms like using the same.

A good business-type crypto should have a clearly laid out whitepaper explaining both its short and long-term goals. A excellent example of this is IOTA that is built to power the machine economy, encompassing the internet of things.

  • The status of Bitcoin if the crypto in question is an altcoin

Finally, Bitcoin is usually the currency behind which the value of altcoins is tagged. If the value of Bitcoin falls, the value of most altcoins will also plunge, apart from extremely exceptional cases, and vice versa. This means that, if Bitcoin is likely to experience a favourable long-term outcome, most stable altcoins are also likely to enjoy the same.