Cryptocurrencies are a highly speculative asset class that is prone to high volatility. Is 2020 the year in which you should hodl your crypto? We will explore the reasons that support holding cryptos this year.
Volatility rules the altcoin market and can make investors wary of having such unstable assets, but this volatility can also be a great way of buying more holdings and potentially make profits when the prices go up again.
In this article, we will be taking advantage of the upcoming altcoin season and why you should not sell off your assets right now.
Bitcoin and Its Price Movements
Bitcoin started rather strong in 2020, surpassing the $10,000 mark. In January, traders noticed a strong pullback to $5,000 levels. And they were right; in March BTC dropped to $5,000.
A number of popular analysts on Twitter state that Bitcoin is currently carving out a bottom. There have been a lot of reasons for Bitcoin’s recent slump. The first one is the recent coronavirus outbreak, which has impacted all financial markets around the world. The second reason would be the impending Bitcoin halving that is expected to affect the entire crypto market.
Will a New Altcoin Season Come in 2020?
People usually buy altcoins for two things: either to buy more BTCs by selling those altcoins when they grow in price against Bitcoin or to hold and keep said altcoins hoping to increase in price significantly later on, so that they can make a profit.
Buying and holding Bitcoin and altcoins is a safer strategy for those who do not want to deal with frequent price swings. Day traders are accustomed to these types of fluctuations and have experience in reading price charts and indicators in order to determine when is the best time to sell off and buy the coins they have to make a profit.
Holding crypto is basically on the same principle as day trading, but instead of making multiple trades in one day to capitalize on price fluctuations, you usually buy the coin at its bottom, then…