Investing in cryptocurrencies such as Bitcoin is a tough game especially due to its regular wild swings associated.
Bitcoin investing: Investing in cryptocurrencies is a tough game especially due to their regular wild swings. However, not anymore. A new report by two Yale University economists analyses historical price patterns and lists two indicators which can be used to get an idea which way the the popular cryptocurrency may move next. So, these indicators may help you in discovering the best time for investing in Bitcoin.
The research paper penned by Yale University economics professor Aleh Tsyvinski and economics Ph.D. candidate Yukun Liu makes an attempt to formulate and find out potential indicators for cryptocurrency returns. The paper analyses price data for cryptocurrencies such as Bitcoin, Ripple and Ethereum. For Bitcoin time span begins 2011 and ends 2018. Ripple’s XRP and Ethereum’s ether data starts 2012 and ends 2015.
Even though the authors don’t guarantee the results, the two indicators can be fairly meaningful for telling about the next move to be made by Bitcoin in advance.
Talking to CNBC, Tsyvinski said if the price of the cryptocurrency witnesses sharp increase over the week, it’s most likely it will continue to rise in the coming week as well, at least in the near term. Just like bonds, stocks and other financial products, the pattern holds truth for Bitcoin as well.
Investor attention effect
The amount of hype around any cryptocurrency online gives a fair amount of idea how it will move in the coming days. More are the online searches about bitcoin, its price would rise in the coming few weeks.
Bitcoin was trading at $6,299.18 up by 0.28% on CoinDesk today at the time of reporting.