Handling New Coins - When to Buy and When to Sell?

ChainPlay

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2 months ago

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With their prices near all-time highs, It has become increasingly difficult to make substantial profits on Bitcoin and even Ether. However, opportunities still exist throughout the cryptocurrency market. One such opportunity can be found in new coins. Coins that have just been launched, or have yet to be launched. Typically, these coins will enjoy price boosts if they have seen a successful presale, when it is announced they will be listed on major centralized exchanges, and again when they hit centralized exchanges.

Finding New Coins

New coins have not yet been listed on centralized exchanges. They might be available on decentralized exchanges (DEX) or, if they are at presale, buyers can commit cryptocurrency to receive the coins directly to their wallet when they are launched. Use lists of potential future coins on Coinbase, join in chats on Telegram, and follow Reddit and social media chats to help identify the coins.

Research them thoroughly, including checking the whitepaper, determining viable use cases, and researching the team. Follow niche experts and proven analysts, as well. If you find a project you believe in, be prepared to invest quickly. According to crypto writer Michael Graw, prices increase an average of 91% within five days of achieving a Coinbase listing. 

Buy Projects You Believe In

You need to do thorough research into any project you are considering investing in. Read the whitepaper, paying attention to the token economics (tokenomics) as well as the team behind the project, its use cases, and its roadmap.

Check Coinbase, Binance, and other exchanges to find their requirements for listing new coins. If a project meets these requirements and you believe in the project, buy before prices increase.

Buy At Presale

Presales occur before a cryptocurrency is developed. The process can last weeks or even months and during this time, developers offer a discount on the coin’s expected list price for those that get in early. The earlier you invest, the lower the price you pay. You can also earn additional bonuses and discounts through staking, as one of the efficient preparatory actions for growing your crypto assets.

Buy Before They Hit Centralized Exchanges

The Coinbase effect - by which tokens listed on Coinbase have reportedly had higher price surges - is significant on new coins. Even if there’s a rumor that a coin will be listed, it can give a boost in price, and when it is announced that the coin will be listed, there will be a clamor on decentralized exchanges and via private sales to buy the coin. While prices can increase over the first few days after a coin is listed, the biggest gains can come as soon as the coin hits the exchange, which means you will miss out if you haven’t already invested.

Sell For Profit

Not all coins experience a price increase after being listed on Coinbase. In fact, some will decrease in price. This is why it’s important to do your research before buying into any project and to buy at the right time.

For those coins that do experience a price boost, the peak of the pump will usually come after two or three days, which makes this the prime time to sell and take profits. Have a strategy and researched target in mind before you invest and be prepared to cash out your profits when you hit those targets.

Sell When Sentiment Is Waning

Sentiment is a strong driver of the cryptocurrency market. Ideally, you should be watching chats, social media, and the general media sentiment regarding any coin you invest in. As well as identifying potential pump and dump schemes, this will help you identify when a coin is going to be listed and it can also identify the right time to sell.

You can also use technical analysis, especially details of trading volume, to help you identify the moment when sentiment is starting to drop off.

Sell When Your Opinion Changes

Some exceptional-looking projects can turn out to be duds. Even if you do thorough research, new information can come to light that makes you rethink your whole opinion on a particular coin. Don’t be afraid to get out of a project if your opinion changes, as long as that opinion is backed by solid research and genuine information.

You won’t make a profit with every single trade and you need to be prepared to take the occasional loss. This way, you will be in a better mind frame to cash out before things get worse.