3 Strategies to Try for your Next Crypto Trading

Last updated on September 1st, 2022 at 10:22 am

Bitcoin continues to lead the way of different cryptocurrencies in the matter of market capitalization, acceptance and user-based. Apart from the fact that Bitcoin piloted a decentralized peer-to-peer network, giving clearance to different waves of cryptocurrencies. It has become the actual standard for cryptocurrencies, inspiring an ever-growing battalion of followers and dreamers.

As we stand amid the institutionalization and standardization of Bitcoin, more funds are joining the space. Entrepreneurs and businesses adapting this system are recognized and acknowledged as these technology innovations help them approach modern problems with aid and tools to expedite accounting processes. Even the first country has adopted Bitcoin as legal tender, and they have several exchange-listed companies now owning Bitcoin. Many experts and crypto believers expect that this trend will likely continue onwards.

With the new survey conducted by crypto experts, considering the bitcoin price prediction in 2050, an astonishing 54% of the panel thinks bitcoin may likely replace fiat currency by 2050. This is great news and an indication to everyone, whether an old bitcoin user or just recently considering Bitcoin, as this opens opportunities and a wider reach of profitability.

As simple as holding bitcoin or other cryptocurrencies has been a profitable strategy. So when you are in the middle of considering how to invest in Bitcoin, one strategy might be to buy and hold. The gains have primarily outpaced that of different asset classes. This is true especially during crypto bull markets when corrections tend to be short-lived. However, it is also crucial for investors to remember that Bitcoin and other cryptocurrencies are highly speculative investments. So here are the three broader and highly technical strategies you may want to try for your next Crypto Trading:

Technical Analysis

Cryptocurrencies have a low interconnection to the fundamentals of economic data and other markets; the main drivers for analyzing them might be the crypto-specific news and trends and technical analysis.

TA or Technical Analysis involves using mathematical indicators and chart patterns to predict how prices will move next. An example of this is an analysis of the bitcoin price prediction in 2050. Some technical indicators are generated with a computer program like TradingView (for example, RSI).

Relative strength index or (RSI) is one of the well-liked technical indicators. This is one perfect example of how someone doing day-trading cryptocurrency might use TA. This comes out as a single line below a chart showing a value between 0 and 100. The nearer the RSI gets to 0, the more oversold conditions are thought to be, meaning prices could rise. The nearer the RSI gets to 100, the more overbought conditions are thought to be, meaning prices could fall.

Bot Trading

High-frequency trading (HFT) or Bot trading involves using algorithms and trading bots that can be programmed to perform a large number of trades instantly. Applying this method requires proficiency and knowledge of advanced programming with combined trading strategies. 

Traders do not simply sit back and let a computer program crypto trading bots conduct the trading itself, high-frequency rendering to do all the work. Instead, trading bots involves developing a specific strategy, developing the appropriate program to execute that strategy, and backtesting, constant monitoring, and updating the algorithms to keep up with ever-changing market conditions. 

Range Trading

In using a range trading strategy, you need to understand that this assumes that prices tend to move within a specific range. This strategy involves looking at resistance levels and using candlestick charts and support.

Traders are advised to buy when prices reach a support level and sell when prices get a resistance level. Or it indicates when they might go short when prices hit resistance and close out the short when prices fall to support.

One great example of range-bound trading is the Pivot points. Calculating pivot points give traders and investors an idea of what price levels are likely to see the turnaround.

Timing the markets can be complex, and human traders now compete with sophisticated computer bots. Therefore, strategies may depend on what is currently happening in the crypto markets. Liquidity and volatility are essential for any trading strategy, so any cryptocurrency with sufficient liquidity showing high fluctuations could be a good option. Keep in mind that just because an investment has risen in the past does not mean it will continue to do so.