E Crypto Trading Strategy In A Volatile Market

According to Statista, the cryptocurrency industry was valued at about $17.7 billion in 2016. In 2017 through January 2018 the market rallied to a value of about $828 billion only to later that year fall to $134 billion. Last year, it gained again to top $190 billion in a relatively slow period. Currently, the industry is valued at about $266.88 billion according to CoinMarketCap but a lot could change before the end of the year. 

Overall, this demonstrates the volatile nature of the cryptocurrency market. The ‘buy and hold’ strategy popularized as ‘HODLing’ in the cryptocurrency space may not be ideal for all crypto investors. 

The volatility of the market means that there will be significant drops in the value of investments over extended periods of time, which could be shortly followed by a sharp gain. This cyclical transition from a bull market to a bear market could continue to repeat in the foreseeable future until the uncertainties and risks that continue to circle around cryptocurrency investing are eliminated. 

As such, it is important to come up with a crypto trading strategy that capitalizes on the volatility of the market while at the same time reducing the risk of loss. To successfully begin making money from a highly volatile market, it is important to point out what an effective crypto trading strategy entails. 

It is imperative to consider the main factors that affect cryptocurrency trading. This guide on crypto trading for beginners has more comprehensive coverage of the topic. Next, a trader must factor in their risk threshold and capital they are ready to commit. 

Factors affecting crypto market volatility

Every effective crypto trading strategy must consider government influence on the market. One of the biggest uncertainties about cryptocurrencies is regulation. There is a big debate about whether government regulation would be good or bad for cryptocurrencies. As such, every bit of news that mentions an attempt by the government influence matters in the cryptocurrency market tends to raise the level of volatility.

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Disclosure: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor does ...

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William K. 4 months ago Member's comment

One more question is about how this currency acquires actual value. "Bitcoin Miners" use banks of computers to solve equations that somehow provide "value". But how does that actually provide any benefit to any, that equates to actual WEALTH?? The fundamental basis of currency is that it is useful for exchanging wealth in a convenient manner. So where is the actual value (wealth) attached to the various currencies? The whole concept looks a lot like monitizing the wind, but perhaps not as solid.

William K. 4 months ago Member's comment

Embracing alternative currency schemes is always a risky thing, and considering that one of the major "benefits" is avoiding government observation it appears that one major use is hiding illegal and anti-society actions. Of course there is the ability of avoiding the manipulations of the huge banking interests, and that may be the sole actual legal benefit.

Michele Grant 4 months ago Member's comment

I am not a fan of #cryptocurrency for precisely this reason. It enables criminals and. Additionally it can be hacked (anyone who says it can't is kidding themselves) and then you have no FDIC insurance, or any other recourse as it can not be tracked.

I am fine with digital currently which is regulated and protected, but I've never heard valid arguments by honest people on why we specifically need a cryptocurrency.

William K. 4 months ago Member's comment

A perfect example of why bitcoin and such are needed comes from a recent hacker incident. I was threatened with extortion based on false accusations, and the instigator demanded payment in Bitcoin, which is untraceable. So it is the perfect currency for illegal activities.

Michele Grant 4 months ago Member's comment

Exactly. It's untraceable with no paper trail. I recently read about an entire town's computer system was hacked - no 911, etc. They were forced to may over $600,000 in ransom money and they perpetrators got away as a result.