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The Best Bitcoin Trading Strategies (That Still Work in 2020)

Sponsored: This guide can introduce newcomers to some of the most common bitcoin trading strategies.

The post The Best Bitcoin Trading Strategies (That Still Work in 2020) appeared first on Bitcoin Magazine.

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This is a sponsored article provided by NordikCoin.

Bitcoin trading has never been more popular than it is now, and the market doesn’t show any signs of slowing down. So, if you’ve considered getting in on the action, now is the time to strike.

While there are numerous bitcoin trading tools available, you still need an understanding of the basic strategies to succeed.

We’ve created this guide to introduce newcomers to some of the most common trading strategies. But seasoned traders may also wish to refresh their memories and adopt new strategies for 2020.

Here’s what we’ll cover in this trading strategy guide:

  • HODling
  • Hedging
  • Trend trading
  • Breakout trading

If you’re eager to get started, then we suggest you head over to NordikCoin and create an account now. It only takes a few minutes, and then you’re ready to buy and sell bitcoin.

1. HODLing

The term “HODL” was coined on the Bitcointalk forum back in 2013. It’s not an acronym for a complex trading strategy — it’s simply the word “hold” misspelled. The author of the original post mused that traders who were new to the game or unsure of their trading skills were better off HODLing their bitcoin in a bear market.

Back in 2013, bitcoin saw a surge from less than $15 per BTC to over $1,000 toward the end of the same year. The term “HODL” has appeared in numerous cryptocurrency memes and is now a widely-recognized trading strategy.

The premise is simple: Hold onto your bitcoin and hope that the price will surge again so you can sell with massive gains. It’s not a very elaborate trading strategy, but it can be sound advice for new traders.

It’s worth noting, however, that the bitcoin price could also dip instead of rising. That’s why we advise you to have a plan for risk management in place if you choose to go this route.

2. Hedging

Ever heard of the term “hedge your bets”? That’s exactly what this trading strategy is all about.

Since bitcoin is volatile, there’s always a chance that you’ll lose money on trades in the short term. That’s why it can be a good idea to hedge your bets by opening a trade that’ll mitigate that risk.

There are a few ways to go about that.

You can short-sell, which means you sell your bitcoin with the expectation that the price will go down so you can buy it back at a lower rate. Many traders will borrow bitcoin from a broker, trade it on an exchange and then return the amount they borrowed.

But that can be risky if the price goes up instead of down.

You can also hedge with contracts for difference (CFDs), which are derivatives rather than actual cryptocurrency. In that case, you’ll hold your bitcoin in the hopes that the price will go up in the long run, but open a CFD that bets on the price falling. Whether the price actually goes up or down, your gain on bitcoin or the CFD will offset the loss on the other.

Finally, you can hedge your bets with bitcoin futures. These are contracts between two parties who agree to trade bitcoin at a certain price on a specific future date. Whether the price of bitcoin has gone up or down on that date, you’ll make the trade and take either the win or the loss.

3. Trend Trading

Trend trading is a strategy that relies on the current trends in the Bitcoin world. You’ll need to keep a close eye on what others are talking about and plan to do.

For example, bitcoin became incredibly popular in 2017, when the price rose to almost $20,000 per BTC. There were many reasons for that, but the main one was that bitcoin received a lot of publicity. That meant more people wanted to get in on the action, which increased demand — and thus increased the value of bitcoin.

You can engage in trend trading over any period of time, whether that’s days, weeks, months or years.

You just need to have an idea of what will happen next.

For that purpose, you can use technical analysis to help make an educated guess. Some of the indicators in technical analysis include relative strength index (RSI) and moving averages over time.

Although trend trading can seem less risky than other strategies, it’s worth remembering that there are hundreds, if not thousands, of factors that influence the price of bitcoin. These include businesses adopting bitcoin, other cryptocurrencies entering the market and governments implementing new trading regulations.

4. Breakout Trading

Breakout trading is similar to trend trading; the difference is that you aim to buy or sell bitcoin at the beginning or end of a trend.

You need to understand support and resistance levels, which are often referred to as the floor (support) of the bitcoin price graph and the ceiling (resistance). In other words, these are the price points bitcoin won’t drop below or rise above.

The points at which those levels are broken either upward or downward are called “the breakout points.” Once this happens, you can usually expect the price to become very volatile. 

Again, the trick is to correctly anticipate what will happen next.

If you’re able to do that, then you can make some really good deals. There are different ways to identify the support and resistance levels, including to look at volume levels, RSI or the moving average. Once you know that, you can create an order to buy or sell at a specific price point that makes sense.

As with the other three strategies we’ve covered, breakout trading is not without risk. So even though you’re able to create an automated buy or sell order, it’s wise to keep a close eye on the market movements rather than to remain passive.

What to Know Before You Trade Bitcoin

Before you dive headfirst into bitcoin trading, there are some last points we need to touch on. As mentioned, it’s easy to get started with bitcoin but not as easy to become a master of the art.

1. Research Your Chosen Trading Strategy

There is more to each of the four trading strategies than we’ve covered in this guide. Make sure that you do proper research before you commit to any of them.

Fortunately, there are many resources online, including e-books, e-courses and videos that will teach you how to trade bitcoin.

Just remember that none of the strategies, regardless of how popular they are, come without risk.

2. Create A Bitcoin Trading Plan

Once you know which strategy you want to pursue, you should create a trading plan. Just like any other business venture, it’s important to have your criteria for success and failure in place.

Without a plan, you could become the victim of your own greed for more or fear of losing. The plan should include realistic goals for how much you hope to make and a risk profile that includes how much you’re willing to invest or lose.

3. Make Sure You Mitigate Any Risks

We’ve mentioned risk a few times now, and there’s a good reason for that.

All trade, whether it’s stock trading or bitcoin trading, involves a certain element of risk. One of the main risk factors in bitcoin trading is the volatility of the bitcoin price.

One of the ways you can mitigate risk is to put limit-close and stop-loss orders in place. That way, you can secure any profits or limit any losses before the market gets out of hand.

4. Find A Safe and Reliable Bitcoin Exchange

Finally, you should carefully consider your options when it comes to bitcoin exchanges. Not all exchanges are equally fast and safe to use, so we recommend you do your research.

NordikCoin is a convenient and secure bitcoin exchange. We enable you to buy and sell within minutes so you don’t lose out on a good opportunity.

At the same time, we take great care to protect your bitcoin. We use a multi-signature and cold storage solution to prevent unauthorized access to your funds.

Ready to Make a Killing in 2020?

We hope you’ve found a Bitcoin trading strategy that’ll make you rich in the new year. The four approaches we’ve covered are all tried and tested. But remember to do some further research, and don’t be afraid to reach out to us at NordikCoin if you need some extra advice on how to open an account.

The post The Best Bitcoin Trading Strategies (That Still Work in 2020) appeared first on Bitcoin Magazine.

Source: https://bitcoinmagazine.com/articles/the-best-bitcoin-trading-strategies-that-still-work-in-2020?utm_source=rss&utm_medium=rss&utm_campaign=the-best-bitcoin-trading-strategies-that-still-work-in-2020

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Swipe’s SXP Token Jumps Over 25% Ahead of Swipe Governance Mainnet Deployment

The price of Swipe’s SXP token has jumped well over 25%, from $1.29 to $1.65 at press time, after Swipe Governance’s (SG) smart contracts were successfully audited by CertiK and SG’s mainnet deployment started being prepared. According to an announcement posted on Twitter, Swipe Governance’s smart contracts were successfully audited by CertiK, and Swipe Governance’s […]

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The price of Swipe’s SXP token has jumped well over 25%, from $1.29 to $1.65 at press time, after Swipe Governance’s (SG) smart contracts were successfully audited by CertiK and SG’s mainnet deployment started being prepared.

According to an announcement posted on Twitter, Swipe Governance’s smart contracts were successfully audited by CertiK, and Swipe Governance’s mainnet is now scheduled to be deployed on Friday, October 2.

The tweet points out that the Swipe Governance protocol will allow SXP token holders to vote and control various paraments of the cryptocurrency’s development via the Swipe network.

Responding to the announcement some users touted their faith was restored in the project and they are now “super bullish” on it. Notably, others pointed out that the news appeared to have been leaked somewhere, as before the official announcement the price of the SXP token started surging.

The code behind the Swipe Token itself had notably already been audited by CertiK. In an announcement published last year, Swipe pointed out the audit was meant to ensure the SXP token would be “secure against some of the most critical vulnerabilities.”

The token, the team wrote, is the “center piece of network fuel and access to receiving the services provided by Swipe.” The announcement details CertiK conducts audits using Formal Verification, which goes beyond checking for bugs and vulnerabilities and “leverages rigorous mathematical theorems to check whether the source code of a program meets its specification.”

The Swipe Governance audit announcement saw SXP’s price jump to over $1.8 before the token’s price started correcting. The token hit an all-time high of $4.3 back in August, one month after leading cryptocurrency exchange Binance acquired Swipe for an undisclosed sum.

Source: CryptoCompare

Binance acquired Swipe and listed the SXP token back then. The cryptocurrency exchange’s acquisition of the firm appears to be related to its Binance Visa Card, a cryptocurrency debit card that lets users pay with crypto anywhere Visa is accepted.

The Binance Visa Card uses Swipe’s technology and rolled out to users in the European Economic Area earlier this month.

Featured image via Pixabay.

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Blockchain

Bitcoin Closes Above $10,000 for a Record 63 Days Straight

Bitcoin (BTC) continues to break new ground. According to data aggregated by Messari, on Sunday, 27 Sept., it broke another record — closing at $10,793, thus making it 63 consecutive daily closes above the $10,000 handle. The current streak eclipses the previous record of 62 days, which lasted from Dec 1, 2017 – Jan 31, […]

The post Bitcoin Closes Above $10,000 for a Record 63 Days Straight appeared first on BeInCrypto.

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Bitcoin (BTC) continues to break new ground. According to data aggregated by Messari, on Sunday, 27 Sept., it broke another record — closing at $10,793, thus making it 63 consecutive daily closes above the $10,000 handle.

The current streak eclipses the previous record of 62 days, which lasted from Dec 1, 2017 – Jan 31, 2018, a period during which bitcoin reached its all-time high of just above $19,900.

Bitcoin’s latest extended consolidation above the five-digit mark, however, is proving different than previous runs. This time around, there is less hype, and in terms of price, things are relatively quiet, mostly fluctuating between $10,000 and $12,500.

In fact, the 180-day return volatility for the world’s premier cryptocurrency has dropped nearly 50% in September, per Coin Metrics.

During the last three months, any dips under 10k were aggressively bought. And according to The Crypto Lark, this is evidence of “halving effects starting to be felt.” In reaction to the news, the co-founder of Morgan Creek Digital and well-known podcaster Anthony Pompliano, for his part, tweeted:

Striking a slightly different tone, Matt Kaye, the managing partner of Blockhead Capital, commented,

we are essentially at $11k with no euphoria. No derivative long build-up. High stablecoin balances. Shorts are still unwinding. The sentiment is cautious at best (justifiably so with macro backdrop). Appreciate the rarity of this moment.

The broken record occurred around the same time it came to light that investment firm Grayscale was again adding to its Bitcoin Trust. At current prices, the additional investments are said to be about 17,100 BTC, worth approximately $186 million.

Meanwhile, bitcoin’s price is approaching a crucial resistance area, a breakout above which could confirm that the trend is bullish. For more in-depth Bitcoin analysis, click here.

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Source: https://beincrypto.com/bitcoin-closes-above-10000-for-a-record-63-days-straight/

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Optimism For Ethereum as Layer 2 Testnet Gets Launched: What Does It Mean?

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Layer 2 scaling developers at the Plasma Group have recently announced the launch of their Optimistic Ethereum testnet, which will be deployed on projects to test much needed scaling solutions.

Essentially, Layer 2 scaling involves taking work off the root chain to process data and transactions faster. The team has built a system called OVM, a fully-featured Ethereum Virtual Machine (EVM) compliant execution environment designed for L2 systems.

The OVM was first tested on Uniswap’s Unipig L2 decentralized exchange launched as a demo in late 2019.

Synthetix The First Guinea Pig

The Optimistic Ethereum testnet will be rolled out in several phases bringing early adopters on gradually so that the team can individually support each project.

On-chain synthetic assets DeFi protocol Synthetix will be the first to trial the scaling solutions offering 200,000 SNX in rewards to their users for participating. The team added that the testnet is currently open for public use, but not yet for public contract deployment as there will be bugs that need ironing out first.

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Phase A of the testing will involve airdropped tokens that will allow participants to mint and burn sUSD, the Synthetix native stablecoin, and claim staking rewards. This will be done using the Görli Ethereum testnet.

Phase B will enable deposits and include an airdrop of Layer 1 Görli SNX tokens to participants who can increase their stakes if they perform a deposit. Phase C will allow withdrawals, and participants must complete a successful withdrawal to receive their testnet rewards on the mainnet.

Optimistic Ethereum is the only generalized L2 solution for Ethereum, which means that it does not require specific functionality to be built to support existing L1 protocols.

Synthetix posted a guide for users wanting to take part in the tests, stating;

“This is a huge milestone for Synthetix, Optimistic Ethereum, and indeed the entire Ethereum space.”

Ethereum Fees Update

A week after the digital dust has settled from the Uniswap airdrop and UNI launch, gas fees have fallen back a little. From a high of almost $12 on September 17, the average transaction fee has fallen back to around $2.75, according to Bitinfocharts.

This is still way too high, though, and it is hoped that many more Layer 2 solutions will be deployed to DeFi protocols over the coming months so that they can remain on Ethereum. The ETH 2.0 scaling upgrade is still at least a year away, so efforts such as Optimistic Ethereum could become its savior until then.

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Source: https://cryptopotato.com/optimism-for-ethereum-as-layer-2-testnet-gets-launched-what-does-it-mean/

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