Whether you’re a toddler or a veteran of the crypto world, you’ve faced some failures or losses at one time or another. Failures are part of the learning process, but the challenge is, what if you could learn without suffering significant failures? Let’s see some of the worst advice in crypto as an illustration of what not to do while trading cryptocurrency and other blockchain assets in the cryptocurrency market.
Buying the All-Time High
Buying the ATH (all-time high) or buying a coin at the top is a classic mistake, sure to result in a loss. It can happen if you watch prices pump and experience fear of missing out (FOMO) or if others persuade you. When the price crashes, your losses can easily reach 30 to 40%, if not more. Sure, you may not know the top, but good investment guidance would prioritize not losing your money over trying to make money.
To overcome this, there are a few things you can do to avoid failures:
1. Open up the coin’s financial charts on the best crypto currency exchange in India like Bitcoiva.
2. Verify whether the current pump is bearable or not. If the price curve is parabolic in shape, there is little chance that the cryptocurrency growth is natural, and it is unlikely that the coin will reach ATH again.
3. In the case of linear price growth, there may still be the hope of minimizing your losses or even turning a profit. You need to be patient and check the charts until you find a fair price to sell at. All this is super-simplified, of course. To understand charts, you should head to the Bitcoiva blog and read up on its posts around the technical analysis of cryptocurrency India.
Buying Micro-cap Coins From Cryptocurrency Market
A newbie’s mistake is buying a coin simply because it is cheap or supported by an individual or group. Most coins that come under this category have either a minimal use case, no use case, or best-case scenario –are someday to prove their potential. Always check the market cap of a coin rather than its token price to avoid making this mistake. It is because the market cap determines how much crypto can pump its price.
If you’re unsure how to check how much a top cryptocurrency in India has potential in terms of growth, check other coins in the same coin category and compare their daily traded volumes, online engagement, and market cap to see where it stands.
Buying A Coin Because Of Endorsements
Never invest in a cryptocurrency or Crypto Exchange India just because a public figure promotes it. It likely owns a large share of the cryptocurrency market supply. Avoid every coin shilled by famous people since high-quality coins don’t need advertising to perform well in the market. It’s always wise to read a coin’s whitepaper before deciding to buy, and it also saves you from getting trapped in any scams that may occur.
Falling Prey to Cryptocurrency Market Scams
Be watchful of cryptocurrency buy in India deals that sound too good to be true. We outlined a few common crypto scams you could be mindful of:
Cloud multiplier scams
Fraudsters often contact victims by text or email with an “investment opportunity.” They promise to give users double or triple the amount if they send their cryptocurrency to a particular digital wallet.
Malicious wallet software
Be aware of malicious software scams, as this software deceives investors by asking them to click on the link and installing the software to steal money. The best crypto tips will always teach you to stick with big-name crypto wallets, such as Ledger, Trezor, Exodus, or MetaMask.
Buying A Coin Because of Social Media
Social media sites such as Reddit, Twitter, and Instagram are full of pages shilling for coins you probably have yet to hear of or with terrible use cases. They often talk about prices’ going to the moon if you hold long enough. Keep in mind that everyone who shills for a particular coin is either paid by the developers or has invested too much time and money in the project, resulting in them being biased heavily in its favor.
To prevent getting blinded by the hype on social media, it is essential to DYOR or Do Your Own Research. Doing your own research is a way of knowing whether the coin has future potential or is a scam being used to deceive beginners.
Sell Because A Market Crash Is Coming
It is a mistake that even experienced traders can occasionally fall victim to. Fears of a market crash are a constant in both the equity and the crypto ecosystem. People often need to remember that a market crash is never permanent. A hit is followed by a pump, sooner or later. In this case, the best solution is to hold. Or at least not sell the bottom.
As we all know, the cryptocurrency market is unpredictable. In February, there were fears of a massive crash due to the Russian invasion of Ukraine. The next day, these fears were in vain since the markets went up instead of down.
Go All In
The worst mistake is not diversifying their portfolio and investing all their funds in a singular coin. While it works once in a blue moon, more often than not, it could be better. A significant investment in any single coin is a considerable risk, as even a slight dip can wipe out a large percentage of your profits.
The only way to prevent this is by diversifying your portfolio. Diversifying your crypto portfolio is smart and will help minimize losses if one crypto goes down.
Forgetting Your Crypto Keyphrase
If you deploy a hardware wallet for storing your crypto offline, forgetting your keyphrase is like losing the keys to a bank vault. All your cryptos will be irretrievable without your keyphrase. So always remember your crypto keyphrases.
After going through this list of “things not to do when investing in crypto,” hopefully, you are a bit more aware of some common mistakes a crypto trader can make, no matter how long they have been trading. Armed with this information, what coin are you investing in next?
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