Bitcoin trading done right: strategies, price factors and analysis

Bitcoin trading done right: strategies, price factors and analysis

Whether you’re a newbie or a professional, working with Bitcoin can be pretty challenging, especially in trading, where your strategies must develop faster, compared to investing, where you can easily lengthen them on a scale of a few years. 

Bitcoin is the first cryptocurrency ever created and has grown in popularity rapidly, contributing to its high volatility spikes and competitive advantage. The coin has achieved the status of store of value and is considered by official authorities as a commodity, earning even the title of legal tender in El Salvador for a year now. 

Despite all this development, Bitcoin is still a mystery to many, as people wonder if it’s really as valuable as traders and investors believe. So, today, we’re going to get through some strategies that make Bitcoin trading more accessible and approachable. 

Bitcoin trading explained

In simple terms, trading Bitcoin means buying and selling cryptocurrency at the right time with the help of an exchange app. There are numerous ways of trading it, offering users plenty of income opportunities in a short time. However, trading must be done cautiously because it’s riskier than investing since it’s more dynamic.

To trade Bitcoin, you need to make an account on a crypto exchange, add money, and select the quality of Bitcoins you want to use for trading. You also need a digital wallet to store your coins, and since there are many types of them, you can choose the safest or most convenient, depending on your needs. In addition, you can try an automated crypto trading bot to make your job more manageable if you’re a beginner or don’t have enough time on your hands.

Most known Bitcoin trading strategies

To be a successful trader, you must follow a strategy layout because it helps you plan your next move and estimate how much you’ll have to invest to earn a certain amount of money. While there are plenty of strategies, some of which you can always trust to be successful include the following:

  • Day trading is the method of entering and exiting trading positions on the same day to avoid overnight exposure to risk. Benefits include stable risk management and fast profits, but you must be wary of the difficulty of closing the position and the intense market;
  • Swing trading involves knowing price patterns in limited periods to create a better plan for trading. It’s more offering from the timing perspective and less stressful, but you must invest a lot of time in research, and the terms are pretty tricky to understand;
  • Position trading is the best long-term trading strategy because you buy and hold Bitcoin for as much as it is profitable. Hence, it’s more approachable for beginners as predictions are easier to make with the best crypto trading bot, but profits will come later;
  • Scalping is perfect for those who want to make small but frequent profits. Although it can provide considerably high win rates, scalping is quite risky and only professionals are advised to use it because it requires consistent market knowledge;

Price factors to consider when trading

Trading is linked with Bitcoin’s price, which is changing quite fast from one week to another, especially during a bearish run. Bitcoin is known as the most volatile digital asset, which might scare some traders. Still, considering how much value it has gained in the past years and how well it overcame financial difficulties, the currency is seen as worth the risk for many.

Understanding how Bitcoin prices are shifting isn’t that difficult. Some factors influence it more or less, such as the following:

  • Bitcoin has a limited supply of 21 million coins, which makes it more valuable as it reaches the end of the maximum cap. For now, approximately two million Bitcoins are remaining in circulation, which triggering an increasing demand;
  • Bitcoin has the highest market capitalization rate, which is calculated by multiplying the current price and the number of coins in circulation. Despite a limited coin supply, it has a better market capitalization than Ethereum, which has an infinite coin supply;
  • Bitcoin was and is the most talked about cryptocurrency in the media, partly because it was the first to revolutionize the financial market but also because it was a strong asset that proved to be valuable through the years;

Analyzing Bitcoin from two perspectives

It is important for traders to analyze Bitcoin from fundamental and technical perspectives because this helps them understand it better to comply with price fluctuations. First, to consider the fundamental approach, you must read and understand what makes Bitcoin the asset it is today. Documents such as the whitepaper will definitely help you but also consider learning about liquidity and trading volumes, as well as other important metrics that contribute to its development.

There’s also the technical analysis, which is also the most difficult since it requires consistent knowledge and willingness to adapt to new projects on the market. You must get used to reading price patterns in the forms of bar charts and candlesticks, of which every shape differs in significance. Many other indicators of resistance levels and trend lines are essential for a thorough market understanding.

Bitcoin trading means patience

Many traders make the mistake of entering the market’s waves with little to no knowledge base, which is a grave mistake because it cannot be learned as you go. Luckily, there might be trading simulators that help you understand how this works, but in the end, when you face an actual chart and a market crash, you must act fast and well.

Hence, Bitcoin trading requires patience because you must take the time to learn a significant amount of information and put it into practice based on others’ experiences. Therefore, before you start trading, take a few months to learn as much as possible about Bitcoin.


Bitcoin trading is one of the easiest ways to benefit from fast income. However, since Bitcoin is pretty volatile compared to other cryptocurrencies, you must prepare with much patience and knowledge to minimize risks and leverage profit.

Yellow Cube

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