You were aware that a pair of cryptocurrencies is the price of two different cryptocurrencies or tokens, in which the value of one of them is compared against the other. An example would be the pair BTC / USD (Bitcoin / Dollars) or ETH / BTC (Ethereum / Bitcoin).
Before we must know what is a pair of Cryptocurrencies? Cryptocurrency pairs work by comparing the cost of one cryptocurrency against another to establish its value. Another example to that is differences between litecoin and bitcoin.
What is a pair of Cryptocurrencies?
Fundamentally, it is not very different from going to a store to see a product that interests us and determining its value according to an amount of Fiat money (Euros, Dollars, pound).
The most important cryptocurrency pairs in the world, not all cryptocurrency pairs are useful to operate with them. If you want to examine the availability and the exchanges in which you can trade certain pairs, you can do so through Coinmarketcap.
Once inside the web, it would circulate to the cryptocurrency that we want to consult. Then we would go into the “Market” tab and we would have all the information available.
How to choose the best cryptocurrency pairs to operate?
You must take into account, mainly and very focused on How to choose the best cryptocurrency pairs to operate? Traders decide on the market only after conducting a great analysis. Initially, they do the fundamental analysis of a few cryptocurrencies to choose an asset that should bring them the highest returns.
Next, they carry out a methodical analysis of the cryptocurrency pairs to understand trends and market behavior. It is necessary to be clear a fundamental analysis and a technical analysis are not enough to start trading.
The greatest trading duo must be select. It seems simple, but if you choose the wrong pair, you will only make minor earnings or even suffer losses.
Another term to consider is what is a currency pair? In a pair, one currency is stronger than the other, although this strength is not constant and can change due to certain reasons, which are generally important financial events in the region.
This is why it makes sense to compare currencies and value them against each other. Pair consists of two currencies. One currency, the first, is called the base currency. And, another currency, the second, is known as the quote currency. In the forex market, they are usually separated by a bar.
The way to read it is sequential. That is first things first and second things second. The EUR / USD pair is read euro-dollar pair. Despite the script that comes out in the middle, everything is read together. The base currency is read first and then the quote currency.
Other question arises. How is the Interpretation of a currency pair made? You must know how to read a currency cross, and let’s see how it is interpreted.
That is if we see that the EUR / USD is trading at 1.10 or that the USD / JPY is trading at 130, what does that mean? Well, the figure at which it is trading tells us how much of the quoted currency is exchanged for each unit of the base currency. It is good to cite an example:
• EUR / USD is trading at 1.10, which means that 1.10 dollars (USD) are exchanged for one euro (EUR). Seen from another perspective, we could say that for every euro (EUR) they give us $ 1.10.
• Let’s look at another example with the USD / JPY pair. If this pair is trading at 130, it means 130 yen (JPY) are exchanged for one dollar (USD). Or, that for every dollar they would give us 130 yen (JPY).
Also a respectable choice is Ethereum for use in exchange pairs. It is practically as common as bitcoin and the main reason for it is the smart contracts of the Ethereum platform.
The third option of cryptocurrency is USDT. It converted in common only two years ago and is one of the top firm coins. USDT is used everywhere because its exchange amount is tied to USD, so far it offers the paybacks of a cryptocurrency.
Remember that the decision at the time of investing will always depend on the user’s analysis before the investment. Avoid risks.