A lot of people enter the stock markets or, for that matter, buy Bitcoins to get rich quick. And obviously, most of them fail! It is said that only 1% of traders make money in the stock markets.
People were buying Bitcoins earlier this year, before its halving. The prices rallied steadily. And thinking that it would rise further, more people joined in. However, we soon witnessed BTCUSD crashing down! And that’s when all those herd buyers panicked, after losing a ton of money, of course!
The fundamentals of investing in Bitcoin
Taking a cue from Warren Buffett’s style of investing, the key to any long term investment activity is
“buying a wonderful asset at a fair price than a fair asset at a wonderful price.”
Cryptocurrency would be a game-changer in the future. Keeping that in mind, one needs to invest in BTCUSD with a long term view. Moreover, BTC has proved its worthiness in an otherwise bear market.
Bitcoin is at an attractive valuation now, set to rise soon
Bitcoin is currently trading at $9232.75. The daily chart reveals that BTCUSD is trading just below the 20-day Exponential Moving Average.
If Bitcoin manages to rise above the EMA, which it should pretty soon, it will stay above that for a while. Now, a crucial thing to notice is the RSI. It seems to be in an uptrend, suggesting that there is an emerging number of buyers.
Therefore, instead of following the herd, an investor should analyze the market conditions and then make a move. With Bitcoin not in the overbought territory yet, it could be an excellent opportunity to buy BTCUSD.
Check out BTCUSD Chart on TradingView.
BTCUSD rose 44% despite the trembling economic conditions this year
The Coronavirus pandemic caused a devastating market crash this year. However, BTCUSD rose by more than 44% during this time. On top of it, with the Central Banks printing an abundant supply of money, many economists say that deflation is just around the corner. Bitcoin could be a safeguard against a possible deflation.