Bitcoin trading is a method of speculating on price fluctuations in cryptocurrency. Rather than buying bitcoin on an exchange and hoping for a price hike, cryptocurrency traders are using derivatives more to bet on both rising and falling prices in order to take advantage of bitcoin’s volatility.
With IG, you can use financial derivatives like CFDs to speculate on the price of bitcoin. This product allows you to earn profit from price changes without owning the coins; that means you can stay tension-free about the protection of any bitcoin tokens. Sign in to bitcointrader2.com/login to get started. But before that, learn about trading.
Factors that decide bitcoin’s price
To profit from a rising market or to avoid the next bubble, you must first comprehend the factors that influence bitcoin’s price:
- Bitcoin’s supply is limited. The total bitcoin supply is limited to 21 million coins, which will be depleted by 2140. Since bitcoin has a finite supply, its price will rise if demand increases in the coming years.
- Unfavorable publicity. Any breaking news about bitcoin’s stability, value, or long-term viability would depress the coin’s overall market price.
- Integration is a term used to describe the process of the incorporation of Bitcoin into new payment modes and frameworks of banking are essential to its public profile. If this is accomplished successfully, demand for bitcoin will increase, resulting in a price increase.
- Important occurrences. Bitcoin prices may be affected by regulatory changes, security breaches, and macroeconomic announcements. Any agreement between users on how to speed up the network could boost trust in bitcoin, causing the price to increase.
Bitcoin trading style and strategy
Day trade bitcoin
Day trading bitcoin means you’ll open and close a spot in a single trading day, meaning you won’t be exposed to the bitcoin market instantly. This means you won’t have to pay for overnight funding on your spot. If you want to benefit from bitcoin’s short-term price fluctuations, this strategy might be for you. It allows you to take advantage of regular price volatility.
Trend trade bitcoin
Taking a stance that corresponds to the latest trend is known as trend trading. If the market is in a bullish cycle, you would go long, and if the market is in a bearish trend, you would go short. If this pattern began to slow or reverse, you would consider closing your spot and opening a new one to align with the new trend.
Bitcoin hedging strategy
It involves taking an opposite position to the already opened one to reduce your risk exposure. In case you are worried about the current market turning against you, you’d do this. For example, if you own bitcoins and are worried about their value dropping in the short term, you can use CFDs to open a position. If the market price of bitcoin falls, the profits on your short position will compensate for some or all of the losses on your long position.
HODL bitcoin strategy
Buying and keeping bitcoin is known as the ‘HODL’ technique. Its name comes from a misspelling of the word “hold” on a prominent cryptocurrency forum, and it is now commonly referred to as “hold on for dear life.” This word, however, should not be taken too seriously; you should only buy and keep bitcoin if you believe its long-term price will rise. You could sell your positions to take benefit or limit loss if your analysis or trading strategy suggests it, or you might set stop losses to close your positions automatically.
How to get exposure to bitcoin
- Instead of buying bitcoin, you’ll be contemplating its price with CFDs if you trade bitcoin derivatives with ethereum code. As a consequence, you’ll be able to speculate on bitcoin’s price rising or dropping by going long or short.
- Those that use a buy-and-hold bitcoin strategy can buy bitcoin through an exchange. This is because purchasing bitcoin via an exchange entails taking full possession of the cryptocurrency, with the hope that its value would increase.
- You can trade Crypto 10 Index, which gives you exposure to 10 big cryptocurrencies like Bitcoin in one single trade, in addition to selling bitcoin futures or purchasing coins directly from an exchange. This index bets on these Cryptocurrencies and closely follows or mirrors their underlying market price.