2 signs that it’s time to sell the digital currency
Following the previous article about the signs telling you that it’s time to buy a specific digital currency, in this article I would like to share with you some more advice about how you can know that it’s time to get rid of the digital currency and perform digital money exchange.
When you trade cryptocurrency you can both gain a great deal and you can lose all that you’ve got in a wink of an eye. Digital currencies are not stable, so it’s very important to know when you should start selling the currency that you possess. All-in-all, you should have a very good strategy at hand.
#1. Topping pattern
To be able to understand this time you should have at least some experience in reading candle charts. And if you don’t, I’d advise you to take a look first at one of my previous articles, where I spoke about candle patterns and how you can sport the trends before they happen.
You can see the topping pattern at the chart below.
As you can see, the wix of the candle is several times bigger than the actual gain of the day. It means that at this specific moment the buyers of the cryptocurrency were coming in too quickly and that’s when they understood that it wasn’t a really good idea, the digital currency became overbought. So that’s when the graph starts pulling back and the price starts moving down.
So when you see such a candle at the top of the graph, especially with the low volume cryptocurrencies, be sure to get rid of this cryptocurrency as soon as possible.
To see how it works on the real chart, let’s take a look at the digital currency OmiseGO.
As you can see, after a short candle with the long wix at the top at huge pullback followed.
#2. ‘Head-and-shoulders’ pattern
The pattern you should be looking for really looks like one head and two shoulders on its sides.
This is a very common pattern. Can often meet it at the cryptocurrency and stock graphics. Another name for this pattern that you can come across is the Elliott wave.
A very huge downtrend usually follows after this sign. You can see it at the example below. This is the chart of OmiseGo again, and you can see that people start selling off the digital currency as soon as they realize that this is of the head-and-shoulders pattern.
This trend can be usually seen with the cryptocurrencies the that are developing very quickly. When you see that the price is rising all the time, there’s so much strength in the digital currency, but after a while the steam runs out and most likely the downfall is going to fall very soon.
Also, following the first tip, you can also notice many topping patterns, followed by the downtrends, on this graph as well. So, whether you buy OmiseGo or perform ETH to BTC exchange, keep your eyes open to see these signs.
Conclusion
So these are the signs that you need to look for, and when you see them, it would mean that it’s time for you to sell digital currency and perform digital money exchange.
But keep in mind, that these are no strict rules. Of course, they work in most cases, but not always. So you should always have at least several cryptocurrencies and you should not invest all the money that you’ve got into only one of them.
If you’re looking for the best Bitcoin exchange rates, you can find them at bestrate.org.
