5 Things to Consider Before Selling Your Cryptocurrency

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5 Things to Consider Before Selling Your Cryptocurrency

When should you sell your crypto?

To many, the answer is obvious – when the price is high. However, there are more things to consider before selling your cryptocurrency.

#1 Check the Market Sentiment.

Before you decide to sell a cryptocurrency, it's crucial to consider the market sentiment. The sentiment is the prevailing attitude of investors as to anticipated price development in a market—a gut feeling that is not always based on facts or figures.

Bullish investors hold an optimistic view regarding future price developments, while those trading with a bearish mindset believe that prices will go down or stagnate. 

The strength and uniformity of this opinion will determine the level of optimism or pessimism in the market.

If, for example, most investors hold positive views about an investment (i.e., they're "bullish"), then their expectations will be reflected in the asset's price appreciation and increase its value accordingly. 

The opposite is also true. If there are more negative opinions than positive ones (i.e., people are "bearish"), then the asset's value will decrease following their sentiments.

When making investment decisions, it's vital to take into account all available information regarding market sentiments—such as industry trends and company developments—for your strategy to be effective over time.

#2 Observe the Major Cryptocurrency Trends.

Cryptocurrency markets are unpredictable. Since cryptocurrency prices are volatile, you need to be careful when trading. Thus, it becomes necessary to keep track of the latest cryptocurrency market trends.

The cryptocurrency value depends on many factors, including supply and demand.

The price can drop due to factors like regulatory changes or hacking attacks on exchanges.

The market for these digital assets has grown incredibly fast over the past few years—it's hard for regulators and investors alike to identify all its internal moving parts at this point.
#3 Check the Value of Your Cryptocurrencies.

Before selling a cryptocurrency, the first thing you'll need to do is check its market value. If you don't want to check the value manually, there are plenty of free apps that can do it for you, or there's always a website like CoinMarketCap.com that tracks the percentage increase/decrease of hundreds of different cryptocurrencies in real-time.

It's also useful to note how market value changes over time so you have some context for what's happening with your currency right now. For example, if you're holding onto a currency that has been losing value for weeks, it might be worth considering if it will ever rebound before deciding to sell.

As an example, let's check the last month of data on Ethereum (ETH), one of the biggest cryptocurrencies currently on the market:

The numbers from CoinMarketCap indicate that Ethereum was at $230 per ETH (token) on May 1 and $330 per ETH on June 1—a 35% increase from $230 to $330 is pretty good! However, Ethereum lost half its value halfway through June and went down as low as $160 per ETH before gaining back some ground over about a week and ending mid-month at around $200 per ETH.

This information could be useful if you had been holding onto your Ether since May 1st and were considering selling because things had slowed down or gotten boring. 

While they might not be gaining any ground right now personally (if they're falling in price), other people are just getting into cryptocurrency now who think Ethereum is poised for growth in the future.

The developers behind this particular blockchain project could easily make announcements or release news later in June that fix some of those problems while building hype around their technology again—and those people coming into cryptocurrencies then will likely drive up prices again along with them.

#4 Consider Your Financial Situation.

With the recent surge in cryptocurrency prices, some of you may be thinking about selling your coins. Although this may seem like the logical next step in your growth, there are a few things to consider before you sell.

● Check how much value you've received from mining and exchanges. If you haven't put any money into mining or exchanged your coin for actual fiat currency with a bank, credit card, or PayPal transaction, then you may be missing out on part of the profits that could be coming back to you down the line.

Keep in mind that even though it's possible to mine Bitcoin without using electricity and earn up to $15 per day, it takes several hours—and hundreds of hours—of work each day over many years before these gains can be realized (plus the high costs).

● Check if there are any taxes involved related to exchange transactions. In some countries, cryptocurrencies are treated as property. That means that anyone who receives cryptocurrency is subject to taxation on their gains at their respective tax rate.

If a tax is required and has been paid already, check with an accountant or lawyer first. They'll set up your taxes so that they're paid only when/if you sell something else (like when moving forward in time) instead of right away when anything happens to your assets (like getting hacked).

● Take into consideration what type of cryptocurrency exchange platform will handle your funds. Each platform does things differently than other ones, and there's no guarantee that any particular exchange will keep your payment safe from theft or prevent fraudulent activity by third parties on its platform—even if the company claims otherwise.

#5 Find a Secure and Reputable Exchange Platform.

If you've been following the news, it's common knowledge that cryptocurrency values are volatile. They rise and fall with the force of a meteorological system, crashing and shifting at a moment's notice. This makes it extremely difficult to predict if your investment will be fruitful down the line, so there's a lot of pressure on first-time users to sell when they see an opportunity.

A lot goes into choosing when and how much to sell cryptocurrency for cash or another type of assets like real estate or a car. The first thing you'll want to do is find an exchange platform that suits you, whether that means ease of use or trustworthy security features. You'll also want to make sure your chosen exchange is registered with a regulatory body like FINRA (Financial Industry Regulatory Authority).

After you have analyzed all these things, you can then decide whether or not you should sell your crypto.*

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