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Pros and cons of technical analysis in crypto trading
Technical analysis allows you to monitor the current state of the market and predict price movements based on the readings of specially designed indicators and historical data. However, it is worth noting that the indicators do not work in 100% of cases and can not be a decisive factor that determines the direction of the course, so traders often make errors.
Technical analysis was first used by rice traders in Japan. They found certain patterns and cyclic nature of the market. This is where the famous “Japanese candles” used in some modern charts came from.
Later in the twentieth century american journalist Charles Dow discovered the patterns of the stock market:
- Predictability. Any market movement is caused by specific events and it is natural.
- The market is cyclic. Everything that happens can happen again under similar conditions.
- There are patterns in any market. These patterns allow you to determine whether the trend direction will be maintained or changed by evaluating the impact of the factor.
All these rules formed the basis of the "Dow theory", which became fundamental for technical analysis of the market.
Now every exchange displays a standard minimum set of tools for technical analysis by default. They may differ on different crypto exchanges, but they are mainly indicators such as:
-Candlestick charts and PA figures;
- Order book
- Trading volume
- SMA (moving averages)
- Additionally, there can be MACD charts
Pros of technical analysis
Technical analysis, if you have experience, allows you to quickly respond to market changes. Fundamental analysis requires time, while technical analysis allows you to identify changes in volumes and quickly make a trading decision.
Another advantage is that trading tools allow you to work with the market at any time and develop your own strategies based on them, combining various indicators and/or figures.
When used correctly, the indicators are quite accurate, especially during local price fluctuations. Indicators are more effective during periods of high volatility, which is typical for cryptocurrencies.
Cons
The main drawback of technical analysis is that it does not take into account fundamental factors that affect the dynamics of the market movement. Indicators are a consequence, not a cause of price formation, but allow you to predict short-term movements with a certain probability, determine the moments of changing trends and track how oversaturated the market is at a particular moment.
Another drawback is the difficulty of learning. The indicators themselves can be learned by any beginner - this is their advantage. But individual indicators are not very effective and may not take into account a number of other factors affecting the crypto market. Indicators are most effective in conjunction with other indicators and PA figures, but they require a lot of time and effort to master them all. Technical analysis requires high accuracy from traders, which is developed through long practice.
Trade-mate.io service uses advanced PA charts that contain all the necessary tools for technical analysis of the crypto market. Using the platform, traders can copy trades of larger players and trading bots on the Binance, BitMEX and Poloniex exchanges, as well as use the Smart Trade function with trailing mechanisms.
What blockchains with smart contracts are available
The first to suggest the idea of smart contracts was developer and cryptographer Nick Szabo. But the idea was first implemented only 19 years later by the founder and creator of the Ethereum blockchain, Vitalik Buterin. We wrote more about what smart contracts are, how they work, and where they are used earlier in one of our posts. Today the Ethereum platform, although it is still the most popular one, is not the only blockchain network that uses smart contracts. There are new promising cryptocurrencies that use smart contracts and expand their functionality.
EOS
Initially, EOS was created on the Ethereum blockchain, like many other cryptocurrencies with smart contracts, but then moved to its own mainnet. By the way, the project raised the largest amount in the history of ICO - the creators managed to attract more than $4 billion, and in China, EOS surpassed both Ethereum and Bitcoin in popularity. Cryptocurrency is second to Ether in terms of capitalization among blockchains with smart contracts.
EOS uses a more versatile and modern engine for creating a smart contract than Ethereum, and the smart contract model itself is more flexible and contains a large number of settings.
Stellar
Stellar is the third after Ethereum and EOS. The platform uses its own SSC smart contract, which is different from the “Ethereum-like” one. SSC allows you to set restrictions and create more complex contracts with a chain of transactions with predefined order and conditions of interaction. In addition, SSC can be written in popular programming languages.
Cardano
Cardano smart contract is developed using Plutus, a Haskell-based programming language recognized at the academic level. This allows to create more reliable and secure smart contracts.
Tron
The Tron project is based on the Ethereum blockchain, but the project has improved smart contracts for use in games and entertainment industry. To create a smart contract, proprietary TVM virtual machine is used. A distinctive feature of Tron is that the transaction fee is zero.
NEO
Cryptocurrency is also called "Chinese Ethereum". Smart contracts are integrated directly with the blockchain, making it less decentralized. However, this simplifies the process of updating the code without affecting the blockchain itself. The development process is also simplified: users can easily issue their own tokens or conduct voting.
For full integration into business processes, smart contracts require improvements to get rid of errors and a high level of automation. Existing smart contracts are not yet able to provide this, but the market does not stand still and new projects regularly appear that expand smart contracts capabilities.
Currently, all the listed coins are promising. You can trade them on the major exchanges like Binance and Poloniex. And the BitMEX platform supports margin trading of ETH. EOS, ADA, and Tron. You can trade on these exchanges through a single terminal on Trade-mate.io, platform which provides the Smart Trade function with trailing and autotrade support.
Main cryptocurrency trends of 2020
The main events associated with the crypto world are connected with the interventions of authorities and financial regulators. The SEC notes that it is positive about the adoption of liquid instruments for trading cryptocurrencies by institutional investors, but exchanges need to meet certain requirements. The legislation is being actively developed that defines the rules for conducting cryptocurrency transactions and taxation of digital money.
Major banks in developed countries, including the United States, Japan, China, and America, are developing mechanisms for creating and maintaining digital analogues of national currencies. Attention to the cryptocurrency sector is increasing on the part of governments, so they strive to meet the requirements of modern society, which shows a high interest in the digital monetary system.
Another major event not only for Bitcoin, but also for the entire crypto market will be halving - reducing the reward for extracted blocks by half. Halving helps protect the cryptocurrency from deflation. You can read more about halving in one of our previous posts. Many crypto experts assume that this will cause a new wave of growth. Time will tell if this is the case. Otherwise, mining will be unprofitable, so large mining pools may stop supporting the Bitcoin network and switch to mining other coins. It is difficult to assess the consequences of such an event, but it can have a negative impact on the crypto market. It should be noted that this event can be decisive for the crypto market either way.
We recommend that you protect yourself and use the Trailing Stop tool, which a service for automated trading Trade-mate.io provides. This way you will not miss the potential growth and at the same time protect your deposit from an unexpected collapse of the crypto market. Trade-mate.io allows you to connect to the Binance, BitMEX and Poloniex crypto exchanges and trade in a single terminal without switching between them.
Another equally important event will be the appearance of the technology giants Facebook and Telegram on the crypto market. Companies are preparing to release their own digital tokens Libra and Gram, which will allow users to make purchases and transfers within messengers around the world in a couple of clicks. Currencies will be easier and cheaper to convert into new stablecoins than through banks, which also applies to bank transfers.
Experts, including former JPMorgan chief Executive Tom Lee and entrepreneur John McAfee, known for his outrageous antics, note a mostly positive trend and claim that 2020 will be a positive year for cryptocurrencies. They agree that cryptocurrencies play an important role in the global financial system, and will flourish.
How to trade crypto on the news
News from the crypto market can have a strong impact on both local price changes and price trends. The news background serves as the basis for fundamental analysis. The latest information can have a positive or negative impact on both individual cryptocurrencies and the crypto market as a whole.
The essence of the news is that they support or spark interest in certain cryptocurrencies, which, of course, affects the price. Examples of such news include major platform updates, partnership announcements, regulatory changes, and so on. However, you should take into account the fact that not all news can affect the price.
For example, news about the consideration of an application for the adoption of an ETF used to spur the growth of the bitcoin exchange rate, followed by the rest of the market. When the application was rejected, the exchange rate, accordingly, fell sharply. This has happened several times, but the story with the SEC has been pretty long, as a result of which the crypto market has become immune to this kind of news, which almost ceased to affect the rate.
What you should know and how to trade
When trading on the news, the price may differ from "normal" trading indicators. And in this case, technical analysis can only act as a supplement, for example, to determine support and resistance levels or the point of a trend reversal, although no one can determine exactly how long the impact of a particular news item will be and when it will stop.
It is almost impossible for any trader to reliably know the peak or minimum value of the rate. Thus, traders need additional tools to improve trading performance that are not provided by crypto exchanges themselves. Trade-mate.io is the platform that provides such tools. The service provides advanced tools for traders and API access to Binance, BitMEX and Poloniex exchanges in one user-friendly trading terminal.
The Smart Trade function supports trailing mechanisms. If you find that after the news appeared, the cryptocurrency rate started to grow, you can set Trailing Stop when creating a task on Trade-mate.io. This will prevent losses in the event of an unexpected price reversal.
There is also Panic Sell button that allows you to sell all coins at once when the entire crypto market begins to fall after the release of negative news. Through Trade-mate.io you can track the price dynamics without switching between exchanges.
It is important to understand that few people have insider information, and only they can buy or sell cryptocurrency before the news are released. Therefore, follow the well-known rule "buy on the rumors, sell on the news”. In the most media, information usually appears late, so it is better to use multiple resources and news aggregators for analysis.
How to increase profit using the Trailing Stop tool
Stop losses protect traders from unexpected rate drops. The trader sets the price at which the stop order should be triggered. Additionally, you can set the level at which the order is placed. But the problem is that exchanges do not provide flexible tools that allow you to automatically adjust orders when the price increases. Traders have to rearrange orders manually.
Trade-mate.io automated trading platform provides this opportunity and has developed a Smart Trade function that supports the Trailing Stop tool. A single trading terminal provides access to three major exchanges at once: Binance, BitMEX and Poloniex. The tool works as follows: the trader sets the stop loss and take profit at the level of, for example, 1% of the open position. When a take profit is reached, the stop loss is automatically moved to breakeven. That is, the stop loss always remains at the level of 1% of the current price of the cryptocurrency until the growth stops. This allows you to increase profits while reducing the risks of a loss on the market reversal.
When will the Trailing Stop tool be useful
During uptrend. In a growing market, rate corrections inevitably occur, and the chart resembles a "ladder" in shape, so trailing stop loss allows you to prevent loss of funds. In addition, it is not always possible to determine exactly when the trend will change direction.
In uncertain situations. For example, when the market is highly volatile, it is difficult to determine the boundaries of the price channel, as well as support and resistance levels. In this case, Trailing Stop is a must have.
It is almost impossible to determine the peak during rapid growth. The risk of a price rollback is stronger the more actively the price of the cryptocurrency grows, but no one wants to miss the potential profit. Trailing stop loss will also act as an insurance for the trader.
In summary, Trailing Stop is a necessary tool, especially for intraday traders. The tool is also suitable for long-term traders, allowing them to avoid large losses during collapse of the crypto market.
To enable Trailing Stop, go to the Smart Trade section of the Trade-mate.io terminal and when creating the task, select the Trailing check box, and then set the level at which the stop order will be set.
Which cryptocurrencies are the best to invest in
For a long time, the common attitude to cryptocurrencies was uncertain. But today we can see how the infrastructure of digital currencies is developing steadily and the crypto market continues to grow, despite the ambiguous attitude of institutions and states.
The popularity of one of the main resources used to observe the crypto market dynamics - CoinMarketCap - is also growing. The service provides a cryptocurrency rating by capitalization and price movement, displays market liquidity and other key indicators, such as the Bitcoin dominance index,
Growth factor
To identify promising cryptocurrencies for investment, it is necessary to identify key factors that affect the crypto market growth:
- Liquidity
- The developers activity and progress
- Volatility and stability of the coin exchange rate
- Prospects for future growth
Often, crypto investors focus only on CoinMarketCap indicators, which is not quite correct.
For example, a large pump of the Bitcoin SV cryptocurrency recently took place, after which the second hard fork took the next position after the "original" Bitcoin Cash. Bitcoin SV was removed from Binance exchange, resulting in a sharp decrease in the liquidity of the coin and this allowed to pump exchange rate on the cheap. But there were no fundamental reasons for growth. However, the sharp growth attracted the attention of new investors, who contributed large amounts of money to the market and significantly raised its capitalization.
When evaluating cryptocurrencies, you should take into account not only fundamental factors and analyze the news background along with prospects, but also study correlation between different cryptocurrencies. To do this, you need to determine the correlation coefficient.
A positive correlation indicates that the price of cryptocurrencies behaves almost identically or at least one partially repeats the movement of the other's exchange rate, depending on the size of the coefficient. The closer it is to 1, the stronger the correlation is. If the correlation is negative, the opposite is true - prices move in reverse. If you make a portfolio only of positively correlated cryptocurrencies, then when the leading coin falls, the entire portfolio will be in a drawdown.
Tradingview charts that are used in the Trade-mate.io autotrading service allows you to define correlation coefficient. To increase profits, the platform provides a Smart Trade function with trailing support. The service allows you to track the dynamics of cryptoportfolio and displays detailed statistics on it.
When choosing cryptocurrencies, evaluate the reasons for their growth and future prospects. The portfolio is built based on a personal risk profile: some prefer to choose some of the top 10 or top 15 cryptocurrencies (except Tether and Bitcoin SV in this case), while others seek to diversify the portfolio by combining more conservative coins such as Bitcoin, Ethereum and Ripple with smaller altcoins. The selection of assets also depends on the investment period: for short-term investments, less liquid altcoins are suitable due to high volatility, while for medium - and long-term investments, larger coins are better due to security.
7 useful services for a novice cryptotrader
Cryptocurrencies became widely popular in 2017, which prompted developers to create useful services that help newcomers get used to the crypto market and facilitate cryptocurrency trading. Here is a list of 7 useful services for novice crypto traders.
Trade-mate.io
Automated trading service. The service allows you to trade cryptocurrencies on different exchanges via API in one convenient cabinet. Binance, BitMEX and Poloniex exchanges are currently available. The following features are available to users::
- Smart Trade that supports trailing mechanisms. This function allows you to set trailing take-profits and stop-losses at the same time.
- Autotrade - this function is used for copying trades of other traders and trading bots.
- Panic sell button, which is used to quickly close all positions at the current market price.
Trade-Mate.io allows you to track the dynamics of your cryptocurrency portfolio and displays detailed statistics on it.
Tradingview
The largest service that provides charts for large crypto exchanges and allows you to track the dynamics of cryptocurrency rates on multiple exchanges. TV charts contain a wide range of trading tools and settings for analyzing the crypto market.
On the site you can find a large number of forecasts for the crypto market, Analytics, expert advice, information on technical indicators, and more.
Bitcointalk
The largest forum about bitcoin and cryptocurrencies. It publishes up-to-date information on cryptocurrency services, exchanges, as well as announcements and reviews of recent projects that are released before they appear in the media.
Coindar
The service is a crypto calendar that provides an up-to-date list of events for all liquid cryptocurrencies. The list can be filtered by various parameters and cryptocurrencies. Coindar provides graphs that mark events, which allows you to analyze their impact on cryptocurrency prices.
CoinMarketCap
A service that displays the dynamics of the crypto market. The site provides information about the capitalization, the level of bitcoin dominance, trading volumes on the markets and price changes for different periods.
It is recommended to trade only those coins that are in the CMC list. Other coins are not of interest to traders and it is best to avoid them.
ICOBench
A large service that provides a list of popular ICO projects. The site provides an expert rating of the project and an analysis of its work, which allows you to track new promising cryptocurrencies that will soon enter the market, and buy them at a low price.
Forklog
A popular cryptocurrency news aggregator. The site constantly publishes current news of the cryptosphere, as well as a calendar with events, forecasts and training materials for beginners.
What is margin trading in crypto
Margin trading means trading using borrowed funds. This allows you to trade larger amounts to get more profit from a single trade and increase your deposit faster. The amount allocated for the trade is provided as a credit.
It should be understood that trading with leverage involves high risks and is recommended only for professionals and experienced traders. If your forecast is incorrect, there is a risk of losing all the money on the deposit.
When opening a position, a parameter such as the liquidation price is displayed - this indicator means that when the specified rate is reached, the position is automatically closed, and the funds allocated for the trade are completely debited from the account and returned to the exchange. The higher the leverage, the closer the liquidation price is and, consequently, the higher the risks are. To avoid losses, it is recommended to allocate no more than 5-10% of the Deposit per trade, depending on the leverage size.
The second nuance that needs to be taken into account is the fees. When using leverage, the trader pays a fee in proportion to the total amount of the trade. That is, using 100x leverage, the trader will pay a fee a hundred times more, so if the forecast is not correct, the losses will be even greater. In addition to the loss from the price difference, if the exchange fee is 0.1%, the trader will lose additional 10%.
Where to trade crypto with leverage
The most popular platform for margin trading in crypto is BitMEX. The platform supports leverage up to 100x, but the selection of cryptocurrencies is small: Bitcoin and a few of the largest altcoins are available to traders. Another popular platform that provides trading with leverage is Poloniex. In 2019, Binance added margin trading as well. The last two sites are required to pass a verification for use of borrowed funds.
Traders can trade on Binance, BitMEX and Poloniex using a convenient terminal from Trade-mate.io. The platform supports Autotrade and Smart trade with trailing mechanisms. Recently, the service added support for margin trading on BitMEX via the API. Trade-mate.io was the first service of its kind to provide such an opportunity. To protect users' funds, leverage is limited to 25x.
How to predict cryptocurrencies price trends
Investing in and trading crypto require knowledge and experience that will allow you to make a profit and minimize losses on the crypto market. You need to learn how the price movement is formed and how to determine the trend change.
Depending on the time period, different approaches and analysis methods are used for forecasting. Cryptocurrencies are closely related to the traditional financial system. There is a tendency to pay close attention to cryptocurrencies during economic crises.
Forecasting is based on two main types of analysis:
* Technical analysis. It consists in finding entry and exit points based on the signals of trading indicators. Usually, combinations of several indicators are used. Technical analysis figures are also used for more accurate forecasting. This type of analysis requires a long preparation and a lot of experience. However, beginners can learn the basic principles of technical analysis using classic indicators. It is most often used for intraday trading
* Fundamental analysis. Here the fundamental factors that shape the price movement of the market are analyzed: news, key events, general trend. It is much easier to learn and apply, but this type of analysis is suitable for medium and long-term investment, and indicators act as additional tools.
Where to get charts for analysis
TradingView (TV) charts are popular among traders, providing all the necessary tools for analyzing the crypto market. These charts allow you to use several indicators to determine important support and resistance levels, trend direction, and overbought/oversold levels.
Trade-mate.io service integrated TV charts to provide users with a wide range of tools. The platform allows you to trade via the API in a single convenient terminal on the Binance exchange. BitMEX and Poloniex. The service provides advanced features such as Smart Trade with trailing support and Autotrade, which provides the ability to copy trades of trading bots and traders.
What is halving and how will it affect the crypto market?
A distinctive feature of Bitcoin and most cryptocurrencies is that their emission is limited. New coins are issued only until the last coins are mined. This approach protects digital currencies from deflation. Banks issue new bills, thereby reducing the purchasing power of money. When the maximum number of coins is reached, it will be impossible to get new ones.
If mining was carried out evenly, there would be no shortage of coins, and this factor plays a key role for the growth of the exchange rate. The halving process was programmed to ensure the coin deficit in blockchain networks.
Halving is reducing of the reward to miners for mining new blocks. Initially, for each block of Bitcoin found, miners received 50 BTC. But every few years, the reward is halved. In 2020, miners are waiting for the 4th halving of Bitcoin, after which the block reward will decrease to 6.25 BTC.
What will this mean for the crypto market? Many crypto experts and enthusiasts note that halving has a positive effect on the rate of the main cryptocurrency and the crypto market as a whole. Previously, some time before the event, Bitcoin began to grow in price and after each halving it only became more expensive.
The previous halving took place on July 9, 2016. As you can see on the chart, even before halving, the Bitcoin exchange rate increased from $439 to $773 per coin. Then the first cryptocurrency continued its growth after a short correction.
But there is also the negative side of halving Halving the reward for new blocks is an extremely unfavorable event for miners. If the exchange rate does not exceed $12,000 before halving, then large mining companies, in whose hands the largest computing power of the network is concentrated, will suffer huge losses. When evaluating forecasts, you should take into account the correlation of cryptocurrencies: a positive correlation indicates that with the growth of Bitcoin associated with halving, altcoin will also grow. If the correlation is negative, the process will reverse accordingly. The correlation coefficient can be found on the Plot.ly website.
Forecasters differ in their estimates, but mostly there is a positive attitude. If you do not want to miss the growth of the crypto market, Trade-mate.io service for automatic trading will help you with this. The platform provides a single terminal for trading on three major crypto exchanges at once: Binance, BitMEX and Poloniex. The platform offers features that cryptocurrency exchanges do not have:
* Smart Trade
* Trailing mechanisms for reducing risks and increasing potential profits
* Autotrade for copying trades
* Panic sell button for a quick sale of all assets
Connect and trade on a convenient platform. For beginners, a free trial period of 7 days is available.
What is a smart-contract: how it works and what it is for
Individuals and companies have to resort to the services of intermediaries when exchanging digital values, which increases operating costs. Transactions without intermediaries are accompanied by risks of fraud. To solve this problem, smart contracts were developed.
A smart contract is a software code that controls and provides information about ownership of something. A smart contract allows you to conduct transactions without intermediaries and guarantees fulfillment of both parties obligations. This eliminates the risk of exchange fraud and reduces transaction costs.
Nick Szabo, a legal expert, and cryptographer, first proposed the idea of a smart contract in 1994. In a simplified form, a smart contract appeared in the first Bitcoin Protocol. Smart contracts became known to a wide audience after the appearance of Ethereum, on which blockchain they were implemented.
How smart contracts works
The implementation of smart contracts is provided by a distributed network of nodes under blockchain control. To ensure that smart contracts work, you need a digital environment that meets technological conditions and requirements. The best environment for self-executing contracts is blockchain, since its structure is based on the principle of signification-confirmation of sending funds using digital signatures.
At the conclusion of the transaction by both parties (signatories), the contract enters into force. The smart contract reserves the necessary amount of cryptocurrency for its duration and monitors fulfillment of the conditions. If one of the parties complied. This is the algorithm of a simple smart contract. Now there are many blockchains (Cardano and Sawtooth, which are based on more advanced smart contracts with advanced features).
Where smart contracts are applied
The most widelysmart contracts are used in the field of ICO -a n analogue of crowdfunding in crypto. Investors transfer coins to the project's smart contract and receive tokens in return. Smart contract guarantees fulfillment of obligations: if the tokens are not issued, the digital coins will be returned to investors. Therefore, ICO tokens were most often issued on the Ethereum platform.
You can use smart contracts in almost any business area. There are such projects in the field of logistics, gambling and rental housing. The governments of some CIS countries are considering the possibility of conducting voting procedures using smart contracts, which eliminates the possibility of election frauds.
Trade on Binance, BitMEX and Poloniex using Trade-mate.io automated platform with trailing and autotrade functions. We provide a seven-day trial period for testing the platform.
Pump&Dump in crypto: how it works and is it possible to make money on it
Pump and dump is a common method of price manipulation on the crypto market, which has existed since the birth of exchanges and trading. The scheme involves artificially inflating the exchange rate of an asset in order to attract new buyers, after which the asset is rapidly sold, leaving in the red traders who bought the asset at the peak of value.
How to determine that you're dealing with Pump & Dump
The first sign is a sharp and unjustified increase in the cryptocurrency price. After such an active growth, most likely, there will be a strong fall, which will return the rate to the previous mark, i.e. before the pump, or close to it. Usually low-liquidity coins that are not included in the top 20 list of CoinMarketCap are pumped.
But it also happens that there are fundamental prerequisites for pump - hot news, major updates or positive decisions of the regulatory authorities. Or when buyers decide that now is a favorable rate to buy for the long term and it is profitable to ”demolish" shortists' orders.
This is what the standard Pump & Dump diagram looks like.
And this figure illustrates the recent “rise” of bitcoin. The price after the pump phase went flat and kept at the same level, although there were no objective fundamental prerequisites for buying.
How to make money on crypto pump&dump
You can make a profit only when you notice the prerequisites for the pump in time. Buying cryptocurrency after a rapid rise in price is extremely risky and there is a high probability of losing money.
It is impossible to know about it in advance if you are not familiar with the organizers of the scheme. You can predict the pump if you notice an increase in trading volumes that usually precede it - so called Pre-Pump. Profits depend on how strong the effect will the pump produce. If buyers are inactive, the organizers will quickly get rid of the cryptocurrency and bring down the rate in a matter of seconds. But there are longer living pumps - continuing for hours or days.
Pampas are often held on exchanges such as Binance, BitMEX and Poloniex. In order to protect yourself when the cryptocurrency rate falls, you have to set stop losses. And advanced Smart Trade trailing mechanisms on the Trade-mate.io service will help you get the maximum profit during the pump, while insuring traders from the risks of a sharp price drop.
Another little insight
Usually, the coins are pumped repeatedly, so you can note the imminent approach of the pump with an increase in trading activity of the coin.
The figure below shows a graph of the classic pumping coin - Maximaine Coin.
Bitcoin, Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, Bitcoin Classic - what's the difference?
Bitcoin is the first cryptocurrency, and from a technical standpoint it is outdated, because it has a number of disadvantages related to the volume of data, transaction speed and scaling. Therefore, developers have created hard forks that change the rules of the protocol and the structure of blocks. Bitcoin holders received hard fork coins based on the number of bitcoins in their wallets: usually on a 1:1 basis. Let's describe each cryptocurrency in detail and conduct a comparative analysis with bitcoin.
Bitcoin Cash
It is the first and the most famous bitcoin hard fork, which appeared on August 1, 2017. Bitcoin Cash occupies the 5th position in CoinMarketCap crypto rating by capitalization. Hard Fork has many supporters in the bitcoin community who believe that it will replace the first cryptocurrency.
In the Bitcoin Cash blockchain, the block size was increased from 1 to 8 MB, which allowed more transactions to be placed in the block and, consequently, to lower the fees.
Bitcoin Gold
Launched on October 24, 2017. The idea of Bitcoin Gold is based on the protocol decentralization, which aims to prevent the dominance of large miners in the market. Equihash is used instead of the SHA-256 algorithm. The project still exists, but has not become widely known.
Bitcoin Diamond
Launched on November 24, 2017. A notable feature of this hard fork is that the creators increased the issue volume tenfold, increased the speed of transactions and reduced fees. Holders of 1 bitcoin received 10 BCD coins. In technical terms, it corresponds to its slogan "the best Bitcoin". The project, like most hard forks, was not particularly popular, but growing still.
Bitcoin Classic
The second hard fork launched on the same day as Bitcoin Cash. The algorithm was based on the EDA mechanism, which allows to protect miners from hashrate fluctuations. Since November 2017, the project is inactive, despite the support of large companies such as Coinbase, Circle and Bitstamp. Even Roger Ver, a well-known bitcoin investor, supported the project.
All of these hardforks, except Bitcoin Classic, are traded on a well-known Binance exchange. BCH is available on almost all exchanges where Bitcoin is traded. And for convenience of trade use the Trade-mate.io service. With it you can trade on multiple exchanges in a single terminal and use a trailing mechanisms to increase profit. In addition to Binance, BitMEX and Poloniex exchanges are available as well.
Cryptocurrency crosses - what is it and how to trade it
Classic exchange quotes show the relationship between assets and currencies, so it is convenient to determine the dynamics of their value. But with the advent of cryptocurrencies, crosses have appeared, which makes it possible to revise trading strategies and hedge risks when trading digital money.
What is cryptocurrency crosses
Cryptocurrency crosses are trading pairs that do not include the US dollar, and allow you to determine the value of altcoins relative to the value of bitcoin. With the help of crosses, you can find out which cryptocurrency dominates the pair.
Cryptocrosses display a correlation between cryptocurrency rates, showing how much one cryptocurrency is dependent on another. If the correlation is strong, currencies in the pair will mostly be interconnected. Bitcoin is the main indicator for the crypto market. Its growth can cause both the growth of altcoins and their fall, depending on the situation. The level of dominance of the main cryptocurrency also plays an important role.
With a positive correlation, volatility will be minimal, and with a negative correlation, if one cryptocurrency falls, the other will grow. This allows you to diversify risks. On the crypto market we sometimes see the phenomenon known as “altcoins season” . During this period, altcoins grow in price, and the bitcoin exchange rate falls, is flat, or grows slightly. With the help of crosses, you can quickly convert BTC to altcoins to increase positions.
The correlation level can be determined using the TV graph integrated into the Trade-mate.io service. With the help of the service, you can analyze and trade cryptocurrencies on three major exchanges at once: Binance, BitMEX and Poloniex. The correlation coefficient indicator is used to assess the degree of correlation. The intersection with the zero level gives signals to buy and sell cryptocurrency in the cross.
Summary
Fundamental factors should be considered in the analysis. Some news influence the entire crypto market, and some are related to specific cryptocurrencies. A sharp fall in bitcoin almost always provokes the collapse of altcoins. Usually, altcoins fall sharper because of lower liquidity.
How to trade Dash
Dash is a cryptocurrency with a high degree of security and transactions privacy. The Dash digital transfer mechanism is based on the principle of shuffling transactions, which does not allow tracking of the sender and the recipient. To ensure security, the Dash Protocol uses 11 cryptography algorithms, thus the name X11 was formed. Previously, the cryptocurrency was called Darkcoin, which accurately characterizes its anonymity. In the Dash network, transactions are confirmed quickly - within a few seconds, and in addition to POW-mining, the masternode mechanism is used.
Strategies for Dash trading
The rate of cryptocurrency correlates with the rate of Bitcoin, which can be used in technical analysis. The fall or growth of the first cryptocurrency will transfer to altcoin. Watch for changes in bitcoin, which serves as an indicator for Dash.
Popular crypto exchanges for trading Dash are Binance and Poloniex, which you can connect to using the Trade-mate.io service for automatic trading. The service provides advanced charts for Tradingview technical analysis, Smart Trade function with trailing mechanisms and autotrade, which allows you to copy transactions of other traders and trading bots.
Fibonacci levels and trend oscillators are excellent for technical analysis, as illustrated by the chart below. Also watch the Volume indicator. Dash has a high volatility and allows you to earn on rate jumps in intraday trading. The volume indicator in combination with other classic indicators will provide fairly accurate signals for buying and selling this altcoin.
A little bit of inside
Dash is a major altcoin, so it attracts a lot of attention. Fundamental analysis will help determine the price trend, since the cryptocurrency is sensitive to news. Dash infrastructure is constantly expanding and new partners join it.
Happy New Year!
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How to trade Ripple
Ripple cryptocurrency was developed in 2012 by Ripple Labs and is a decentralized protocol based on a consensus registry. The main advantage over other cryptocurrencies is low cost of transactions, low fees and high bandwidth. Another feature - coins paid as a fee are burned, so that the volume of Ripple is gradually reduced.
Trading strategies
The exchange rate of Ripple correlates with the rate of other cryptocurrencies weakly, in particular with the rate of Bitcoin, which significantly affects the dynamics of altcoins price. Ripple is suitable for long-term investment, because it is based on an idea that can be used in the financial environment. You just need to choose a good time to buy.
Trend indicators such as MACD, Bollinger Bands, and RSI can handle this task. These trading indicators can be found on the Tradingview charts, which are integrated into the Trade-mate.io service, providing tools for automatic cryptocurrency trading. In your personal cabinet you can trade Ripple on three trading platforms at once: Binance, BitMEX and Poloniex. In addition to autotrade, the service provides smart trade and panic sell functions for instant sale of cryptocurrencies on all exchanges at once. Smart trade allows you to set up trailing stops to increase profit when trading.
In short-term trading, popular technical indicators and TA figures work well. Due to the low correlation with other cryptocurrencies, Ripple can be used as an asset hedging tool. The figure shows that the “Double bottom” figure worked well.
Lifehack
Ripple system protocol is widely used in the banking sector, so it is used for cross-border payments and currency exchange. National banks are integrating the protocol to ensure payment security. Regular news about a partnership with another large bank may provoke a rise in the Ripple rate.
How to trade Monero
Monero was created in 2014 as a Bytecoin fork. The main emphasis was on the privacy and security of user data. Even today, Monero is considered one of the most anonymous cryptocurrencies.
How to trade Monero
Monero is one of most sensitive to news events coins. The more significant are events, the stronger the price will react after publication. Digital currencies capitalization is significantly smaller compared to traditional financial markets, which is why there is a lot of price volatility. There is also a strong correlation between the rates of Monero and Bitcoin.
To analyze the price behavior, Tradingview charts are the best, providing all the necessary tools for trading cryptocurrencies. In fact, any of these indicators is quite effective on its own, but if you combine them, you can get better results.
Monero is traded on many crypto exchanges, among which Binance and Poloniex are particularly popular, combining high liquidity and a large number of trading pairs. Trade-mate.io service is developed for convenience, providing a variety of tools to facilitate trading: smart trade with trailing mechanisms, autotrade and Tradingview charts. Users can trade on several exchanges at once. Recently, the service connected the BitMEX exchange, and now trading with leverage up to X25 is available.
As you can see on the chart, the rate of Monero can vary from $52 to $57 within one day. Such price volatility allows trading on hourly and even minute timeframes. Another remarkable feature of the coin is the almost complete absence of flat. During the trend period, Monero has a small volatility, but as the movement equalizes, the volatility begins to grow, which allows you to extract large profits on fast trades.
Secrets of trading Litecoin
Litecoin was developed in 2011 by former Google employee Charlie Lee and is called "The Bitcoin younger brother" and "digital silver". And for a good reason. Its work is based on the Bitcoin architecture. The name Litecoin is symbolic - the size of the blockchain is significantly smaller due to more compact blocks, and the blocks themselves are formed faster than in the main cryptocurrency.
How to trade Litecoin
Litecoin trading does not have any complicated mechanisms, and technical analysis is good not only for intraday trading, but also for trading over longer distances. Beginners will greatly benefit from Trade-mate.io automatic trading service, providing features such as:
-Smart trade, where trailing ladder is available, i.e. take-profit and stop-loss are automatically rearranged as the price changes
-Autotrade. You can subscribe to other traders and channels with signals and copy trades.
-"Panic sell" button that allows you to sell all cryptocurrencies at once.
Sign up for Trade-mate.io to evaluate all the benefits of the service. In your personal account, you can track detailed statistics of your cryptocurrency portfolio and trade on several exchanges at the same time. Trade-mate.io works with three major exchanges: Binance, BitMEX and Poloniex.
Trading secrets
It is best for Litecointrading to use classic indicators, especially trend ones. Th cryptocurrency is quite volatile, which allows you to make a profit in a growing market. This strategy is based on buying on pullbacks and selling high. To improve the effectiveness of the strategy, it is recommended to use several indicators to get a more detailed picture of the state of the market.
You can determine the necessary levels with the help of standard SMA and RSI indicators, which work perfectly together. It is also important to define the boundaries of the upward channel in order to more accurately determine levels where the price rebounds. The only strategy that does not work well when trading cryptocurrency is scalping - large spreads kill it.
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