BTC and how it affects the general market
Upon observing for years now, we can infer that when Bitcoin, the father of all cryptocurrencies, moves, most of the tokens follow. This is why it makes sense that knowing how to read its charts and analyze its patterns should include in one’s decision process before investing in a crypto project.
While it can be intimidating for neophyte traders to understand how Bitcoin moves and how it should be taken into consideration before putting money into a crypto project, there’s a simple way as a starter for you to consider, and that is the market trend lines.
BTC’s trend line
Trend lines are easy to spot, and they are easy to use to determine the market’s price movement. They serve as an indicator of what season the market is currently in, and they are of good use to infer where the supply and demand lie. Generally, if it is ascending or descending, the market is not necessarily bullish or bearish, respectively. This is because trend lines can occur at different time intervals that new traders could mistake for either season.
The trick to this is to look at the market chart that is zoomed out or set to max. Once zoomed out, you will only be able to see a single trend line, and that is the one to follow.
Looking at Bitcoin’s zoomed-out chart, we can see that there is an invisible line that seems to be impenetrable by the market’s movement, and that is what we call a trend line. This trend line guides traders when to buy, what token to purchase, and how long you should hodl your coins.
Since Bitcoin’s movement is an essential determinative factor for the market’s performance, knowing how Bitcoin will perform in the future is a great skill one must have to be able to get the most out of your risky endeavor, such as trading.
Analyzing the market trend gives an idea that the bearish season for some tokens could be over anytime soon as Bitcoin’s price movement has already touched the market trend and is about to ride another wave. It gives us a go signal to buy and increase our hodlings as there is a great possibility that the market could now recover and even reach all-time highs.
The volatility of market trends
An ascending market trend, regardless of if it is zoomed out, does not necessarily guarantee that it will maintain that way throughout. New traders must understand and constantly be reminded that cryptocurrencies are volatile. It could change course anytime, and they could either surge or plunge in an instant.
While Bitcoin’s trend looks promising and it may indicate the start of a bullish season, it’s still out of the woods as the market could reverse itself and start a long-term bearish season instead. With this, we must all be reminded that we must only invest what we could lose and only invest in a crypto project after we have done our research.
Having BTC as an indicator for market price movement is a great and straightforward way for neophyte traders to decide when and what to invest their money in. Since it is readily available to every exchange, analyzing the market is accessible and easy to follow.
But we must use this trick with a grain of salt as this is not guaranteed what you expect as you analyze the trend. The trend may change over time as it is also volatile, but when you have done DYOR and trust that it will not go against what you expected, you are good to go.