Despite what many people would have you believe, investing in cryptocurrency is no easy task. You probably know how volatile these digital assets are, with prices going up or down by upwards of 50% every day.
Of course, the volatility has been less of an issue this year compared to last year, but it still makes cryptocurrency investing risky. The entire industry is young, and that means nobody can tell for certain how well they’ll perform in the future. While many advocates stand firm in their belief that Bitcoin’ real value amounts to hundreds of thousands of dollars, there’s simply no way to tell whether that will hold true.
Owing to the extreme volatility of the cryptocurrency market, many investors adopt the buy and hold approach. This involves buying the coins you want and then keeping them for the foreseeable future. True believers store their coins in secure offline wallets even if prices go down immensely, especially if they believe that these coins will rise in value at one point or another. But what if you take this route and then the right value of Bitcoin turns out to be less than $100? Do you have no other option left other than licking your wounds?
This is where day trading comes in. Many investors in the crypto space don’t merely “hodl” coins. In fact, an increasing number of investors are starting to become crypto traders. One reason for this is the emergence of cryptocurrency trading apps like Crypto Code System. This trading platform makes it easy for traders to keep track of different coins, analyze charts, and find patterns that will hopefully get them to execute the right trades.
Being a day trader in the world of cryptocurrency means letting the long-term trends take care of themselves. You have to care less about how high Bitcoin can get and focus your attention on how much you can make each day through technical analysis. When done correctly, you can predict the immediate movements of different cryptocurrencies, enabling you to buy and sell at the right time.
This technique isn’t new, as it’s borrowed from traditional investing strategies. Over the long term, assets can display a bullish or bearish trend. But things become interesting when you look closely at the up and down movements within this trend. By becoming a technical analyst, you can predict when an asset will go up or down by looking for patterns. Doing this several times a day can earn you a quick profit, which proves attractive for many investors who don’t want to wait for Bitcoin’s price to skyrocket.
Be prepared, though, as technical analysis comes with a steep learning curve. There are different techniques available, and some of them seem to contradict one another. It’s easy to get lost in the middle of all the technical jargon. But despite its complexity, this strategy offers the potential of making money in the short-term. It’s also an excellent way to develop a different perspective on crypto in general. No matter how popular a coin is, it will always move up or down, presenting an opportunity to become a profitable crypto trader.