5 Crypto Laws You Know About But Haven't Guessed

Published: 8 февраля 2023
6 min

Patterns in trading

Everyone who has ever traded on the stock exchange has noticed that when trading, the price of an asset behaves in a certain way with the same type of operations. When trading crypto assets, the situation is identical. You can identify similar trends and describe them with the help of rules. Thus, 5 laws of cryptocurrencies were formulated in the network, which we will analyze in this article.

Law 1. The price of an asset after purchase begins to fall

What does a trader who first registered on the exchange and logged into his account on the exchange do? He is buying assets without restraint. He buys in small lots, but everything that seems promising to him. Most often, coins are selected that have been growing for a long time and are traded at historical peaks of their capitalization.

Looking ahead, we will reveal all the cards - the trader learned about the stock exchange due to the fact that at this moment the markets are in a bullish cycle, and from all sides, TV, radio, Internet and even irons are trumpeting about the growth of markets and the need to urgently invest there in order to get a guaranteed profit.

After buying such assets, their price begins to fall. In the first minutes, the trader waits for the coin to return to growth, buys more, but the fall does not stop. Guided by books about investing, the trader decides to sit out the correction, eventually freezes his deposit for months or years. Having fallen by 50-80%, the cryptocurrency will periodically grow, showing weekly profitability, but it will not think of returning to the values at which the purchase was made.

Why does this law work? Thanks to the work of the media, the whales sold off their positions, which they had been forming at cheap prices for a long time (in the previous bearish cycle), and after even shoe cleaners bought with a coin, there is no one to support purchases - a correction begins.

The asset returns to its fair price. Any assets are in a bubble most of the time, thanks to derivatives and margin trading. Only occasionally do they trade at a fair price.

When buying an asset, try to determine its fundamental price. To do this, open the price change chart and select the maximum trading period, for example, 5 years. Based on the history of fluctuations in the exchange rate, the coin fell 3-4 times to the baseboard itself, trading on loyals. Approximately there is the true price of the asset, however, other risks appear.

Law 2. The price of an asset after sale begins to rise

What to do if there is no way to wait for the asset to recover its price? The money is needed now. Let's say a trader had the temerity to spend his entire salary on the purchase of a promising coin, hoping to get 2-3 x in a week. There is nothing to buy products for, you will have to sell the cheaper asset and close the deal at a loss. Everyone knows this feeling of annoyance - when the amount of your portfolio has decreased, and the profit indicator has turned red. But this is still half the trouble: if you stop trading after an unsuccessful purchase, you can just forget about the failure. And if you continue trading, you will find that after the sale, the coin chart came to life and crawled up.

In a matter of minutes, the price overcame the level at which the coin was sold and exceeded the purchase price. Well, okay, there is a coincidence, the trader decides. The asset will grow all week. As a result, the price will make several x's. Can you imagine what a trader who has missed a profit will feel like? This is the second law of cryptocurrency trading.

It works very well, since you are selling cryptocurrency for a reason. Most likely, you have read on the Internet that this coin is unpromising, because the cryptocurrency was blocked on a well-known African exchange or its developers were sued because they finance pirates in Antarctica who rob the king penguins.

Of course, the media can't lie, and it's a pity for penguins. Succumbing to panic, the trader (and thousands more of the same waiting), will sell the cryptocurrency much cheaper than he bought. What is the idea of manipulation? Everything is simple - the issuer, after placing (ICO) assets on the site, tries to sell its share as expensively as possible. When the coins are placed on the exchange and sold to investors, it is necessary to return the assets back, because there are plans for the development of the project and technology. Then negative news is launched in the press. And yes, if you buy this coin back after it has grown several times, hoping to ride at least part of the growth, re-read the first law of cryptocurrency trading.

Law 3. The placed order will not work because the price did not reach it 0.01 $

It is impossible to trade around the clock, so the trader puts a pending transaction - an order. In addition, traders put stop-losses in order not to lose a lot of money if they did not guess the direction of price movement.

The trader is very surprised when he discovers that he correctly calculated the trend and the price almost reached the selected level, but turned around and went in the opposite direction. As a result, the asset remained in the portfolio and shows a loss.

What went wrong? The fact is that most people trade using technical analysis and place orders based on it. Therefore, a large density of orders is formed at the same levels, which is often used by unscrupulous players.

This is especially noticeable in low-liquid assets. By influencing the price by buying or selling, the player causes the price to deviate, leads it in the right direction, knocking down stop losses and taking the asset. They try to drive the price through empty levels, avoiding large orders.

By the way, that's why little-known tokens, in which no one is sitting yet, shoot so much by hundreds of percent per day. After all, the manipulator does not need to buy assets from anyone except themselves. When placing an order, do not be greedy, it is safer to place an order much earlier than the key level.

Law 4. Participation in a closed ICO ends with a scam

All of us were once called by friends who offered to participate in the financing of a young, but very promising project. Once it was a pyramid MMM.

Today, exchanges are full of initial placements of young crypto projects. After the opening of trading, the token begins to fall sharply, and falls to a value close to 0. The issuer sold all its tokens before the initial placement, and there are no other buyers on the exchange, so the manipulator will buy everything on the exchange for a song. This process never stops. This is how bearish and bullish trends are formed in the markets. At first, everyone buys an expensive novelty, and then they sell it for a long time and cheaply.

No need to look for a second Bitcoin or Ethereum. Invest only in those projects that you have figured out yourself, and have not heard from friends. Don't be greedy, the profitability of the project over 50% is already a great success. Sitting at the computer, you earned half of the invested amount without doing anything. And someone will have to work in the real sector of the economy for a much smaller percentage of profit. For example, to sell pies. By the way, if you do not comply with the fourth rule of trading cryptocurrencies, you may also end up at the tray with whites.

Law 5. Buying the bottom - you get the second one as a gift

According to the first law of cryptocurrency trading, we found out that you need to buy an asset at the bottom. The bottom is the cheapest asset price for all time. But then it would be easy to trade by writing an algorithm that calculated the minimum value itself and bought the desired asset only at the bottom, and then sold it at any price, because it will always be higher.

If an asset has reached its minimum value for all time, and a large group of investors has bought it for both cheeks, the fifth law of cryptocurrency trading works: Buying the bottom, you get the second as a gift.

What's going on again? When an asset falls and panic sales, someone buys coins. This mysterious buyer will be very upset if he does not receive the necessary amount of cryptocurrency, he will have to drive the price even lower, forcing those who bought at the bottom of the market to sell. The price will be heated to the limit value until all margin calls work and freeloaders run away. After the sale of the coin, fans of buying at the bottom will feel the effect of the second law of cryptocurrencies.

You can only fight this by waiting for a trend change, or by buying steps of 5% of the amount at each level. The trader will not get that huge profit, but he will feel much calmer. The money will not be frozen in a fallen asset.


Trading on the cryptocurrency market, you cannot come up with a win-win strategy, but you can formulate principles, albeit sometimes a little ironic, that will help traders cope with excitement and not get a loss.

5 crypto laws are created for this purpose. Traders do not learn well from other people's mistakes and prefer to experience all the charms of the market on their own.

The profit will be with the most patient and unhurried trader, who, when making a deal, knows at what level he will definitely fix a profit or loss. An experienced trader will not get into questionable transactions and will not risk the entire deposit.

It's hard to learn the discipline of trading just by reading an article on the Internet. But take my word for it, it's much better to get smarter in the market before the funds in the portfolio run out. 5 crypto laws will help you with this.

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