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“Crypto Market Watch: Fundamental evaluation, stop orders and P2P trade strategies”
The crypto market has been a highly volatile and fast -developing room in recent years. With the rise of cryptocurrency exchanges, decentralized financing protocols and peer-to-peer trading platforms, investors have access to a variety of investment options. However, navigating in the complex landscape of cryptocurrencies can be discouraging for the most experienced dealers.
In this article we will deal with three key strategies that have to be taken into account when evaluating the crypto market: basic evaluation, stop orders and peer-to-peer trade.
Basic evaluation
The basic assessment is a crucial aspect in investing in a wealth class, including cryptocurrencies. This includes the analysis of the underlying economy and basics of an investment in order to determine the growth potential and profitability.
When it comes to cryptocurrencies, the basic assessment is particularly difficult due to the lack of traditional financial metrics such as profit per share (EPS) or sales growth. However, investors can still get a feeling for the underlying value of a cryptocurrency by examining factors such as:
- supply and demand : The overall offer of a cryptocurrency, including the circulating offer and the overall market capitalization.
- Price-to-book ratio : The price of the cryptocurrency divided by the book value (its total assets minus liabilities).
- Economic indicators : Economic indicators such as GDP growth rate, inflation rate and unemployment rate.
For example, if we examine the basic evaluation of Bitcoin, we can find that it has a low price-to-book ratio of around 25 times. This indicates that investors are willing to pay 25 times the Bitcoin book value in order to acquire it.
Stop orders
Stop orders are a powerful technical trade strategy with which dealers can use a price level under which you automatically sell an asset when it reaches or exceeds this level. The aim of a stop order is to limit potential losses and protect against considerable price movements.
In the context of cryptocurrency investments, stop orders in connection with the basic analysis can be used to create a comprehensive trading plan. For example:
- Entry strategy : Buy Bitcoin at a low price when you see support levels or if you think it has a good chance of breaking above a certain level.
- Stop loss : Determine a stop loss at a price under which the asset is automatically sold and limited potential losses if the market moves against you.
Peer-to-peer trade
The peer-to-peer trade includes the purchase and sale of assets directly with other dealers without the need for a central exchange or a central broker. This model enables investors to exchange cryptocurrencies for their own conditions, reduce transaction costs and increase liquidity.
In connection with the trade with peer-to-peer trade, there are several popular platforms with which individuals can buy and sell cryptocurrencies:
- Bittrex
: A popular platform for buying and selling Bitcoin, Ethereum and other old coins.
- Poloniex : A leading cryptocurrency exchange that offers a wide range of trading pairs and functions such as leverage.
- Kraken : A reputable platform for buying and selling cryptocurrencies that offer extended tools and functions such as position trading.
In summary, a fundamental assessment is an essential aspect when investing in the cryptom market, while stop orders offer a powerful technical tool set to limit the losses and protect profits. Peer-to-peer trade offers investors direct access to the market so that they can act their own conditions and use lower transaction costs.