Trading signals are important when it comes to cryptocurrency trading. Knowing when to buy a cryptocurrency is really important if you want to make a profit out of your investments. However, knowing when to sell your coins is just as important. To help you out on finding good sell signals, we depicted some easy methods you can determine when to sell your assets.
Volume
The volume of a cryptocurrency is perhaps one of the biggest trading signals there is. High trading volume indicates that there is a lot of trading activity is being conducted with a cryptocurrency. If the price of a cryptocurrency is going up, and its volume is increasing, then it is possible that the price is going to continue increasing since it means that traders are mainly buying that crypto.
If the price of a cryptocurrency is going down, but the volume is high, then it is possible that the price is going to decrease because traders are actively selling.
If the price is either increasing or decreasing, but the volume is down, it means that only small traders are trading, the price is unstable, and that there is low interest in that coin. Then, the trend might reverse.
News
Following crypto news is very important. Positive news about a cryptocurrency, such as a new partnership or implementation in any business, is likely to increase the price of a cryptocurrency. The same can be said about negative news, where they indicate that you should sell a cryptocurrency to avoid losses.
Support & Resistance
Support and resistance are two important trading signals in cryptocurrencies. Support indicates a price where the buying interest is higher than the selling interest in a declining price. The price is unlikely to go lower than the support level, meaning that it may not decline more than that.
Resistance is the opposite of that, where it illustrates a price where the selling interest is higher than the buying interest and the price might not increase further than that.
Ultimately, there are lots of signals that might indicate to either buy or sell a cryptocurrency. Today, we focused on some of the most important.
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Takeaways
- Volume is one of the best signals in cryptocurrencies. High volumes indicate lots of trading activity.
- Cryptocurrency news is a very important signal so it is best to follow daily updates. A piece of good news about a cryptocurrency entails a potentially increasing price.
- Support and resistance are two of the main trading signals for cryptocurrencies. Support indicates a price where the buying pressure is higher than the selling pressure. Resistance indicates the opposite.