Bitcoin poses a serious challenge to traditional currencies as the world’s first cryptocurrency. However, considering its price history, there should be a lot of volatility along its path.
Below are four steps that will help you trade Bitcoin:
- Mechanisms to deal Bitcoin
Bitcoin can be dealt with in two ways: buying the Bitcoin itself and hoping to sell it at a profit or theorize on its value without ever owning it. CFDs work in the latter sense. What a CFD does is enable you to deal with a contract that is constructed on the prices in an underlying market. This is a purchased product, which means that you need to initially put down a small deposit and again disclose a much more prominent position. This can appreciate your profits. It should be noted, however, that it has the same effect on your losses.
When trading Bitcoin, do I need to use an exchange?
To take a position on the price of Bitcoin, what you need is an IG trading account. However, when you deal with bitcoins CFDs, you do not interact directly with an exchange. As an alternative, you trade the sell and buy prices sourced from a couple of exchanges on your behalf.
Same as traditional exchanges, Bitcoin exchanges work the same way. This enables investors to purchase the cryptocurrency from or dispose of it to another person. There are some advantages when you cut them out of the picture entirely.
Their service and matching engines are unreliable. This can result in reduced execution precision or shelving of markets.
They inflict restrictions and fees on the withdrawing and funding from your exchange account, while accounts can take long periods to acquire.
When you trade Bitcoin CFDs, you acquire considerably improved liquidity at the touch price you’ve chosen. When you sell and buy from the exchange directly, you will have to accept multiple prices to finalize your order.
- Factors that change the price of Bitcoin
The volatility of Bitcoin makes it an attractive opportunity and dealing with cryptocurrency. Due to the Bitcoin market operating continuously, this can happen at any time of the day. Bitcoin is free from the various political and economic concerns that influence the traditional currency. However, due to its young age, there remains a lot of uncertainty uniquely based on the fact that it’s a cryptocurrency.
Any of these factors can impact its price suddenly and significantly, and for this reason, you need to research and know-how to navigate these risks that may come up.
Even though there are a limited number of bitcoins, the last Bitcoin will be mined in 2140. However, the availability of Bitcoin changes as to how they enter the market. For example, their holders’ activity, dealing with them in Bitcoin slots, also affects this availability.
BTC market cap
The Bitcoin market value is recognized to be both an impactful and opportune because traders will want to jump on a surging opportunity, or not.
What remains to be seen is the impact Bitcoin will have on the corporate stage as it is yet to be accepted generally by most businesses around the world.
- Trading strategies of Bitcoin
When you day trade, there is a need to take a position that considers an accidental movement in the short term. It would help if you also closed it out by the end of that specific trading day. This is an effective strategy if you desire to acknowledge opportunities in the short term in the Bitcoin market. This is in light of emerging patterns or developing news.
This is when you place intraday traits frequently one small movement in price.
This is a worthy strategy if you desire to place yourself in a position to form continuous but small profits. This is when you do not want to wait for a significant breakdown or break out.
This is when you capture trends the moment they are made and clutch on to that position up to the point the trend shows the signs of a reversal or runs its course.
This is the preferred strategy for you if you decide to take advantage of this chance from market momentum.
It is advisable to automate your processes in trading and react to changing market conditions on your behalf.
This strategy is best used if you consider yourself a passive trader.
- The steps to trading Bitcoin
Open an account
You will need an IG trading account if you want to trade CFDs. It is an easy task to do, and you can go ahead and take your first position when you have added funds to your account.
Establish a trading plan
It is always a smart move to establish a trading plan. This works hand in hand with your chosen trading strategy. If you’re new to the market, you need to consider having these two. A trading plan will assist you in making objective decisions regardless of the stakes being high. This mixture that you do not leave trades open for long or close them early.
Do your study
To understand what’s next for the cryptocurrency price, you need to do your research and speed with the latest Bitcoin news. It is essential to do this before you start on your trading journey.
When you are looking up to interpret how Bitcoin behaves, charts are an important tool. Past data is an excellent indicator of how the market is progressing. The comparison of time frames can also provide better insight as to the emerging patterns and trends.
Place a trade
Using a web trading platform, you will be required to place a trade once you have decided on your position.
You need to enter the deal tickets the amount you have decided to stake on your trade.
While you do this, you have an option of defining your clothes conditions: you can set a stop to terminate your position when the market is not in your favor up to a certain amount or a restraint for when it’s move is in your favor. Always check yourself; limits and stops are important to sound risk management.
Note that, if you anticipate Bitcoin to appreciate, you then ‘purchase’ the market. If you believe that it will depreciate, you will ‘sell.’
To finalize your position, you need to place the reverse of your initial trade. This means that if you purchased at first, you’d have to sell the same amount;
If you had sold, you would not need to buy it. You will be required to click sell or buy to finalize your trade as your deal ticket is automatically filled.
- How to trade Bitcoin: Get to grips with the basics of how to trade bitcoin with our step-by-step guide.
- Cryptocurrency trading: Find out how to get started trading cryptocurrency in this step-by-step guide. By Andrew Munro.
Disclaimer: This is a paid post and should not be considered as news/advice.
Buyer of Jack Dorsey’s ‘genesis tweet NFT’ reportedly detained in Iran
Iranian Cyber Police have reportedly arrested Bridge Oracle CEO Sina Estavi, according to a tweet pinned to Estavi’s Twitter account.
A rough translation of the tweet reads:
“The owner of this account was arrested on charges of disrupting the economic system by order of Special Court for Economic Crimes. Official judicial authorities will provide additional information.”
The same tweet is also pinned to the official account of Bridge Oracle, a Tron Network-based public oracle system. At the time of writing, the price of Bridge Oracle’s native token, BRG, has taken a sharp dive, crashing by more than 65%, according to data from TradingView.
Bridge Oracle is said to be a Malaysia-based blockchain company, but Estavi’s other venture, cryptocurrency exchange Cryptoland, was operating in Iran. Cryptoland’s Twitter account shares the same pinned tweet. No further information was shared publicly by the authorities.
Estavi is known for his heated bidding battle with tech entrepreneur and Tron CEO Justin Sun to buy Jack Dorsey’s first-ever tweet as an NFT. Twitter’s first tweet is dated March 2006 and reads, “Just setting up my twttr.”
In the end, Estavi successfully purchased the NFT for more than $2.9 million, or 1,630 Ether (ETH). Dorsey converted the proceeds to Bitcoin (BTC) and donated them to a charity organization in Africa.
Earlier this year, Estavi was sued by former Bitcoin.com CEO Mate Tokay for allegedly failing to pay him for his services. In his claim, Tokay also alleged that there’s an inconsistency between the purported and actual circulating supply of BRG.
Cointelegraph reached out to Bridge Oracle for comment. This article will be updated should they reply.
Bank of America to Settle Stock Trades on Paxos Network
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Is Bitcoin nearing another Black Thursday crash? Here’s what BTC derivatives suggest
Bitcoin’s 51.4% crash in March 2020 was the most horrific 24-hour black swan event in the digital asset’s history. The recent price activity of the past week has probably resurrected similar emotions for investors who experienced the Black Thursday crash.
Over the past week, Bitcoin’s (BTC) price dropped 29% to reach a three-month low at $42,150. $5.5 billion in long contracts were liquidated, which is undoubtedly a record-high in absolute terms. Still, the impact of the March 2020 crash on derivatives was orders of magnitude higher.
To understand why the current correction is less severe than the one in March 2020, we will start by analyzing the perpetual futures premium. These contracts, also known as inverse swaps, face an adjustment every eight hours, so any price gap with traditional spot markets can be easily arbitrated.
Sometimes, price discrepancies arise during moments of panic due to concerns about the derivatives exchange’s liquidity or market makers being unable to participate during times of extreme volatility.
On March 12, 2020, the Bitcoin perpetual futures initiated a much larger descent than the price on spot exchanges. This move is partially explained by the cascading liquidations that took place, creating a backlog of large sell orders unable to find liquidity at reasonable prices.
The aftermath of the bloodbath resulted in futures perpetual contracts trading at a 12% discount versus regular spot exchanges. BitMEX, the largest derivatives market at the time, went offline for 25 minutes, causing havoc as investors became suspicious about its liquidity conditions.
By comparing this event with the most recent week, one will find that sustainable price discrepancies are very unusual. Even a temporary 12% gap doesn’t occur, even during the most volatile hours.
Take notice of how the perpetual contracts reached a peak 4% discount versus regular spot exchanges on May 13, although it lasted less than five minutes. Market makers and arbitrage desks could have been caught off guard but quickly managed to recoup liquidity by buying the perpetual contracts at a discount.
To understand the impact of those crashes on professional traders, the 25% delta skew is the best metric, as it compares similar call (buy) and put (sell) options’ pricing. When market makers and whales fear that Bitcoin’s price could crash, they demand a higher premium for the neutral-to-bearish put options. This movement causes the 25% delta skew to shift positively.
The above chart displays the mind-blowing 59% peak one-month Bitcoin options delta skew in March 2020. This data shows absolute fear and an incapacity to price the put (sell) options, causing the distortion. Even if one excludes the intraday peak, the 25% delta skew presented sustained periods above 20, indicating extreme “fear.”
Over the past week, the skew indicator peaked at 14%, which isn’t very far from the “neutral” -10% to +10% range. It is indeed a striking difference from the previous months’ negative skew, indicating optimism, but nothing out of the ordinary.
Therefore, although the recent 29% price drop in seven days could have been devastating for traders using leverage, the overall impact on derivatives has been modest.
This data shows that the market has been incredibly resilient as of late, but this strength might be tested if Bitcoin’s price continues to drop.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
dotmoovs Raises $840,000 From Strategic Investors and Partners
US Investment Bank Cowen to Offer Crypto Custody Services
Ethernity Chain Immortalizes Tony Hawk’s Last 540 Skate Trick With NFT
Buterin Plugs UNI as Next Oracle Token
Which ‘green’ cryptocurrency is Tesla likely to add for payments?
Bitwise Launches ‘Crypto Innovators’ ETF
Elon Musk Pokes Massive Hole in the Bitcoin Market After Halting Bitcoin Payments at Tesla
BitMEX Executives to Face Trial in March 2022
Facebook’s Diem Enters Crypto Space With Diem USD Stablecoin
Venture platform Cognitive Blockchain invests in cross-chain compute network Cudos
Ethernity Chain Memorializes Tony Hawk’s Latest 540 Skate Trick With NFT
Vitalik Buterin Dumps His SHIB, Price Tanks 30% In 1 Hour
The STC Token is Live – And Over 10 Crypto Exchanges are Ready for It
Diem parters with Silvergate bank to launch stablecoin in the US
DeFi Staple UMA Launches “Optimistic Oracle”
MicroStrategy Buys Another $15M Worth of Bitcoin at $55K
In Less than A Week, How Internet Computer (ICP) Climbed To The Top 10
Here’s why Ethereum, AAVE, ALPHA are unfazed by Bitcoin’s latest ‘Elon candle’
Vitalik Buterin Has Dumped His Unsolicited Doge-Clones
Central Bank of Bahrain and JPMorgan to work on digital currency settlement pilot
Blockchain1 week ago
Crypto Market Cap Added $300B in 7 Days as Altcoins Explode: The Weekly Recap
Blockchain6 days ago
Palantir Accepts Bitcoin for Payments and Considers Adding BTC to Balance Sheet
Blockchain1 week ago
Ray Dalio’s Bridgewater CFO leaves to work on Bitcoin full-time
Blockchain1 week ago
Ethereum price closes in on $4K as Shiba Inu (SHIB) steals Dogecoin’s thunder
Blockchain1 week ago
CFO of World’s Largest Hedge Fund Joins Institutional Bitcoin Firm NYDIG
Blockchain1 week ago
Ethereum (ETH) Hits $3800 ATH As Coinbase Premium Shoots With Institutional Interest
Blockchain1 week ago
Crypto Banter Will Give Away Over $500K To 10 Eligible Community Members
Blockchain1 week ago
Legendary Pelé NFT Set to Drop on Ethernity May 8