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Bitcoin News
$20 Million in Bitcoin Long Positions Liquidated as Price Tumbles From Intraday High
The price of bitcoin saw a significant fluctuation after remaining fairly consolidated over the past two days. After bulls managed to see bitcoin’s price rise to ,754, the value dropped to a low of ,557 per unit shortly after reaching the daily high. Liquidations Rise Following Bitcoin Price Drop Over the past 48 hours, bitcoin […]
Bitcoin News
Bitcoin Hodlers Eye Long Term: $520 Million BTC Go To Cold Storage
Bitcoin (BTC) danced into uncharted realms this week, breaking barriers with a triumphant surge that pushed its value beyond the ,000 mark.
The cryptocurrency world, once again, finds itself in the midst of a thrilling price discovery phase, propelled by an amalgamation of bullish indicators and a notable shift in investor sentiments.
Related Reading: Cardano (ADA) Price Alert: Analyst Predicts 60% Rally In Next 7 Days
Big Players Dominate The Crypto Arena
This week’s narrative unfolded on a stage dominated by two juggernauts of the financial realm – BlackRock and MicroStrategy. BlackRock, the undisputed titan of asset management, sent ripples through the market by filing with the SEC, outlining tentative plans to incorporate spot Bitcoin ETFs into its Global Allocation Fund.
Although in its infancy, this move has ignited hopes for heightened demand, especially through BlackRock’s IBIT ETF, already wielding a substantial 204,000 BTC.
Enter MicroStrategy, the steadfast evangelist of Bitcoin strategies. This corporate behemoth poured more fuel into the already blazing fire by revealing the acquisition of an additional 12,000 BTC.
This move propelled MicroStrategy’s total corporate Bitcoin holdings to an awe-inspiring 205,000. Such maneuvers by industry giants underscore the growing acceptance of Bitcoin as a legitimate and influential asset class.
While headlines may be dominated by institutional power moves, peering into the intricate web of on-chain data reveals the fascinating tapestry of investor conviction.
0 Million In Bitcoin In Transit
IntoTheBlock’s exchange netflow metric showcased a significant outflow of 4,470 BTC on March 11th. This substantial move, valued at over 0 million, saw coins making a pilgrimage from exchange wallets to cold storage.
The implication is clear – investors, despite reaching record highs, are playing the long game, stashing their digital treasures in cold storage rather than opting for immediate profits.
This strategic move, coupled with a surge in demand, paints a bullish picture of supply and demand dynamics.
Drawing parallels from the pages of history, the recent exodus from exchanges echoes a similar event on February 27th.
On that day, a netflow of 8,050 BTC correlated with a breathtaking 26% surge in prices within 48 hours. If this historical rhyming persists, the recent outflow might just be the wind beneath Bitcoin’s wings, propelling it to conquer the ,000 resistance level in the imminent days.
As the stage is set for Bitcoin’s next act, technical indicators join the ensemble, singing harmoniously in the chorus of a potential breakout.
Enjoying Profits
IntoTheBlock’s “Global In/Out of the Money” chart offers a visual feast, showcasing that in this era of Bitcoin’s price discovery, nearly all of the 52 million holder addresses are now enjoying profits. This absence of selling pressure, combined with the rising institutional tide, paints a canvas of explosive potential.
While the bulls eye the lofty target of ,000, technical analysis points to a potential support station at ,000.
This zone, a fortress where over 6.6 million holders acquired nearly 3 million BTC, could stand as a formidable psychological barricade in the face of any price pullback.
At the time of writing, Bitcoin is fast approaching the highly-coveted K level, trading at ,529, up 2% and 10% in the daily and weekly timeframes, data by Coingecko shows.
Featured image from Unsplash, chart from TradingView
Peter Brandt Warns Against Trusting SEC Chair Gary Gensler — Says He Has Long History of Not Protecting Investors
Veteran trader Peter Brandt has warned that U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler should not be trusted. He stressed that Gensler “has a long history of not looking out for the interests of investors.” Brandt further emphasized that the SEC chairman “was instrumental in the bankruptcy” of a major company and was […]
Bitcoin News
XRP Buy Signal Goes Off, Analyst Says This Is How Long Uptrend Will Last
An analyst has recently explained how a buy signal has formed for XRP on its weekly chart, which could lead to an uptrend lasting for this long.
XRP Has Observed A TD Sequential Buy Signal Recently
In a new post on X, analyst Ali discussed a buy signal forming in the weekly price of XRP. The relevant indicator is the “Tom Demark (TD) Sequential,” a technical analysis tool for pinpointing probable reversal points for any asset’s price.
This indicator is made up of two phases. The first phase is called the “setup” and lasts nine candles. During this phase, candles of the same polarity are counted up to nine, and following the ninth candle, the commodity can be assumed to have hit a top or bottom.
If the setup’s completion occurred with nine green candles (the prevailing trend was bullish), then the indicator would suggest a switch toward the bearish direction. Similarly, red candles would imply a buy signal for the asset.
The second phase in the TD Sequential is the “countdown,” which works just like the setup except that it lasts for thirteen candles. After these thirteen candles, another price reversal may have occurred.
The TD Sequential phase of the former type has been completed for XRP recently. Here is the chart shared by the analyst that shows the TD Sequential setup forming in the weekly price of the cryptocurrency:
The graph shows that this TD Sequential setup in the cryptocurrency’s 7-day price has formed with red candles, as the coin’s price has been struggling recently.
The historical pattern could imply that the asset may have now hit a probable bottom point. Ali suggests XRP “is poised for an upswing lasting one to four weeks.”
XRP Has Continued To Go Down Since The Year Has Kicked Off
The year 2024 began for XRP with a sharp move down, from which the asset still hasn’t been able to recover as its price has continued to head downward, staying in line with the tone set by the poor start.
The below chart shows how the coin has performed over the last three months.
A brief relief rally came for XRP around the time of the Bitcoin spot ETF approval, but just like it had played out in the broader sector, this surge also couldn’t last long as investors took to selling the news.
After all the downtrend since then, the cryptocurrency is now trading around the .50 mark, down almost 18% year-to-date.
Bitcoin Long Positions Surge On Bitfinex: Whales Add 4,230 BTC, Signaling Potential Price Reversal
In a surprising turn of events, the approval of spot Bitcoin (BTC) exchange-traded funds (ETFs) has not yielded the anticipated immediate upside impact on the Bitcoin price.
Contrary to expectations within the crypto community, BTC has experienced a sharp drop of over 16% since the ETF approval on Wednesday, January 11, dipping below the key ,000 level. The failure of BTC bulls to hold the support level has led to a testing phase at the ,000 level, accompanied by a 4.5% price drop within the past 24 hours.
Bitfinex Whales Buck The Trend
Amidst the market volatility, according to Datamish, Bitfinex whales have accumulated Bitcoin long positions since November 2023. This accumulation of approximately 4,230 BTC since January 17 marks the first sustained increase in Bitfinex BTC long positions following a sharp decline in November last year.
However, the recent downturn in the BTC price can be partly attributed to increased selling pressure from miners and asset manager Grayscale. Grayscale has notably increased its BTC sell-off since the ETF trading commenced.
Transferring a significant amount of BTC from the Grayscale Trust address to Coinbase, totaling 69,994 BTC (.9 billion), has influenced the market dynamics.
Additionally, reports indicate substantial sell-offs of Grayscale’s Bitcoin Trust GBTC shares, including a notable sale of 22 million GBTC shares by the FTX estate, worth nearly billion.
Bitcoin Liquidation Zones Wiped Off
The impact of Grayscale’s sell-off is evident in CoinGlass’ liquidation heatmap, which shows notable liquidation zones being wiped off in the 1-week chart.
While Grayscale’s BTC dump has contributed to the price drop, the increased accumulation of BTC long positions on Bitfinex indicates a potential change in sentiment. A price reversal could occur if the ,000 support line holds, pushing BTC back above ,000.
Furthermore, excluding Grayscale, institutional investors and asset managers involved in the ETF market have collectively acquired over 86,320 BTC at an average price of ,000, representing a substantial .63 billion investment.
Market experts such as Ali Martinez suggest that these institutions are likely to adopt a strategic, long-term view rather than engage in peak purchases. This level of institutional investment underscores the growing recognition of Bitcoin as a legitimate asset class and signifies confidence in its long-term growth potential.
Currently, the Bitcoin price is at ,800, reflecting a substantial year-to-date decline of over 12% and a 9.7% drop in the past seven days. The duration and extent of the selling pressure caused by Grayscale’s BTC dump remain uncertain, leaving the question of how much further the BTC price may decline.
Featured image from Shutterstock, chart from TradingView.com
Ripple President Monica Long: It’s ‘Critical’ for Crypto to Be Represented at Davos
Monica Long, president of financial and cryptocurrency services company Ripple, has given her take on the presence of cryptocurrency industry actors at the World Economic Forum (WEF) event at Davos. Long stated she considers it “critical” for the cryptocurrency industry to be represented at Davos by mature players to show what is being done and separate it from the hype.
Ripple’s Monica Long: ‘The Industry Needs to Engage With Governments’
Monica Long, president of Ripple, a financial and cryptocurrency services provider, has justified its continued presence at the Davos forum meetings organized by the World Economic Forum (WEF). According to Long, the presence of people linked to the cryptocurrency industry is necessary for bridging the traditional finance world with this new paradigm.
In an interview, Long stated:
It’s critical for our industry to be represented at Davos by mature players who can help dispel the hype that often distracts from the real work being done.
Long explained this is why Ripple will be present this year for the third time in the Davos meetings. Nonetheless, other crypto companies will attend this year, including U.S.-based cryptocurrency exchange Coinbase, stablecoin company Circle, and cryptocurrency projects Stellar and Hedera.
Long sustains that while last year was a disaster for the industry, this one presents promises, given that traditional finance institutions are getting close to the blockchain and its possible applications, including payments, custody, and tokenization. The recent approval of a spot bitcoin EFT product might have also contributed to this newfound interest in the industry.
However, Long stressed that to achieve mainstream adoption, traditional and decentralized finance must amalgamate to serve efficiently the largest number of users possible, meaning that crypto must also adhere to current laws.
She concluded:
The industry needs to engage with governments to ensure that sound policy and regulatory frameworks are established.
Ripple is engaged in a legal battle against the U.S. Securities and Exchange Commission (SEC) that saw a limited resolution in July 2023. However, the commission is now seeking a court order to acquire the financial statements on the institutional sales of XRP.
What do you think about Monica Long’s take on why crypto companies should be present at Davos? Tell us in the comments section below.
Kevin O’Leary Says He’ll Never Buy Bitcoin ETF — Prefers to Hold BTC Long Term
Kevin O’Leary, aka Mr. Wonderful, says he will never buy a spot bitcoin exchange-traded fund (ETF) as he is holding bitcoin for the long term as digital gold. “Why would I pay these fees?” he said, adding that spot bitcoin ETFs “add no value” and are “completely unnecessary.” However, the Shark Tank star explained that the U.S. Securities and Exchange Commission (SEC) approving spot bitcoin ETFs is great news for institutional investors looking to get into crypto.
Kevin O’Leary Won’t Invest in Spot Bitcoin ETFs
Shark Tank investor Kevin O’Leary, aka Mr. Wonderful, gave some advice regarding spot bitcoin exchange-traded funds (ETFs) in an interview with Fox Business last week. The chairman of O’shares Investments and O’Leary Ventures was asked how investors should decide whether to invest in a spot bitcoin ETF and how to choose among the 11 funds that were approved by the U.S. Securities and Exchange Commission (SEC) last week.
“Well, they are almost identical even though each of the vendors would tell you they are not,” he began. The Shark Tank star proceeded to emphasize that each spot bitcoin ETF has a fee that investors should pay attention to. “You want to look at what the fee structure is,” he advised, noting that the 11 spot bitcoin ETFs have fees ranging from around 0.21% to 1.5%. O’Leary opined:
If you are a purist and you’re just holding bitcoin for the long term as a digital gold, as I am, I will never buy an ETF. Why would I pay these fees? It’s completely unnecessary. They add no value to me.
“The great news in this event is it shows a march forward on regulations toward cryptocurrency,” Mr. Wonderful noted.
Regarding the approved 11 spot bitcoin ETFs, O’Leary stressed: “Not a chance they all survive.” He advised investors to watch their assets under management (AUM). Mr. Wonderful continued:
Maybe two or three will win. I’d bet that behemoths like Fidelity and Blackrock end up on top because they have massive sales forces.
Nonetheless, O’Leary said: “Institutions don’t care about this. They don’t care because they’ll never buy an ETF. They’ll never pay the fees.” However, he noted that the SEC approving spot bitcoin ETFS is “great news,” emphasizing that institutional investors like this development. “This is a good thing for them to eventually get into crypto,” the Shark Tank star concluded.
Earlier this month, O’Leary said he anticipates strong institutional interest in crypto regardless of the SEC decision on spot bitcoin ETFs. In November last year, he revealed that “all” of the institutions and major organizations that he had talked to are prepared to invest in bitcoin. “They aren’t interested in the 10,000 token story,” he said. “Bitcoin is proving itself to be liquid enough, it’s proving itself to be a storage of wealth, most people consider it a commodity.”
What do you think about the statements by Kevin O’Leary about bitcoin and spot bitcoin ETFs? Let us know in the comments section below.
Bitcoin “Outlook Remains Bullish,” As Long As This Stays True: Analyst
An analyst has explained that the outlook for Bitcoin should remain bullish as long as the cryptocurrency’s price remains above this level.
Bitcoin Has Strong On-Chain Support Above ,800
In a new post on X, analyst Ali talked about the various BTC support and resistance levels from an on-chain perspective. In on-chain analysis, the strength of any support or resistance level depends on the amount of Bitcoin that the investors bought at said level.
The chart below shows what the distribution of the different BTC price ranges currently looks like based on the concentration of holder cost basis that they carry.
As displayed in the above graph, the ,800 to ,100 range hosts the acquisition price of most Bitcoin out of all the price ranges listed. To be more specific, about 2.4 million addresses acquired 1 million BTC within this range.
The cost basis is naturally of immense significance for any investor, as the spot price retesting can flip their profit-loss situation. As such, holders become more likely to show some move when a retest like this happens.
A holder in profit before the retest might tend to buy more when the retest happens, as they might believe this same level that proved profitable earlier would do so again.
On the other hand, loss holders might want to sell at their break-even level since they may fear the cryptocurrency going down again, putting them underwater again.
These buying and selling moves aren’t enough to move the market when just a few investors are making them, but if a large number of investors have their cost basis inside a narrow range, the reaction could become significant.
Since those above ,800 to ,100 range is dense with investors, it should be an essential on-chain range. The spot price is floating above the range so that these prices could act as a support barrier for the asset. Based on this, Ali explains, “as long as Bitcoin maintains its position above ,800, the outlook remains bullish.”
The chart shows that the Bitcoin ranges above the price aren’t carrying the cost basis of that many investors. This could imply that there isn’t much resistance ahead for the coin.
The analyst notes that this lack of major resistance also strengthens the potential for the cryptocurrency to stay at the current levels or push towards the higher ones.
BTC Price
Bitcoin has been gradually making its way back up after the recent crash, with its price climbing towards the ,800 mark. The below chart shows how the asset has performed during the last few days.
How To Take A Long And Short Position In Crypto
In crypto trading, mastering a long and short position is crucial for success. This guide dives into the essentials like “what is a short position” and “what is covering shorts” as well as strategies for both long & short crypto trading, tailored for traders at all levels. Uncover the strategies behind long positions, aimed at growth and value appreciation, and delve into the subtleties of “going short.”
The Basics Of Long/Short Position Crypto Trading
Before diving into the specific strategies of long and short crypto trading, it’s essential to grasp the fundamental concepts that govern the cryptocurrency market. Crypto trading, at its core, involves the buying and selling of cryptocurrencies like Bitcoin, Ethereum, and others, with the aim of generating profit from market fluctuations. Unlike traditional stock markets, the crypto market operates 24/7, offering continuous opportunities but also presenting unique challenges due to its volatility.
The Market’s Volatility
The cryptocurrency market is known for its high volatility. Prices can dramatically increase or decrease over short periods, making it a potentially lucrative but risky market. This volatility stems from various factors, including market sentiment, regulatory news, technological advancements, and global economic events.
Supply And Demand Dynamics
Just like any market, crypto trading is driven by supply and demand. The limited supply of certain cryptocurrencies, coupled with increasing demand, can lead to price surges. Conversely, oversupply or waning interest can cause prices to plummet. Understanding these dynamics is crucial for any trader aiming to capitalize on market movements.
Trading Platforms And Wallets
Crypto traders can use a variety of online platforms to execute their trades. These platforms vary in terms of security, fees, available cryptocurrencies, and user experience. Additionally, traders can trade Bitcoin and crypto in different forms and on different markets. Options are the spot market, the futures and options market, Exchange Traded Funds (ETFs) and Exchange Traded Products (ETP) as well as Contracts For Difference (CFDs).
Understanding these basic distinctions provides a foundation upon which traders can build more complex strategies, including long and short positions. As we delve deeper into these strategies, keep in mind that crypto trading requires not only an understanding of market trends and behaviors but also a basic technical understanding in order to recognize the value proposition of the respective cryptocurrencies and thus market trends.
What Is A Long Position In Crypto?
A long position in crypto, often simply referred to as “going long,” is a fundamental strategy where traders invest in a cryptocurrency with the expectation that its value will rise over time. This approach is grounded in a positive outlook on the market’s future performance, making it a cornerstone of traditional investment strategies adapted for the crypto world.
When a trader takes a long position, they purchase a cryptocurrency at a certain price, aiming to sell it at a higher price in the future. The difference between the purchase price and the selling price represents the profit. This strategy requires patience and a keen eye for market trends, as the appreciation in value may occur over varying timeframes, from short-term spikes to long-term growth.
Successful long positions often depend on thorough market analysis. Traders need to assess various factors, including technological advancements in blockchain, changes in regulatory landscapes, market sentiment, and broader economic indicators that could influence the price of a cryptocurrency. By understanding these factors, traders can make more informed decisions about when to enter a long position.
While long positions are generally considered less risky than short positions due to the inherent nature of markets to rise over time, they are not without risks. The volatile nature of the crypto market means that long-term investments can be subject to significant fluctuations. Effective risk management strategies, such as setting stop-loss orders and diversifying portfolios, are crucial in mitigating potential losses.
What Is A Short Position In Crypto?
Understanding a short position in crypto trading is crucial for traders looking to capitalize on market declines. This strategy, often referred to as “going short,” involves betting against a cryptocurrency’s value, offering a contrast to the more traditional long position approach.
When traders go short, they sell a cryptocurrency they don’t own with the expectation of buying it back at a lower price. This begins with borrowing the asset and selling it at the current market price. If the price drops as expected, the trader repurchases the cryptocurrency at this lower rate, returns the borrowed amount, and keeps the difference as profit. This process is commonly known as selling short.
The mechanics of a short position are inherently riskier than long positions. The potential for losses is theoretically limitless, as cryptocurrency prices can surge unexpectedly. Thus, short selling demands a deep understanding of market trends and constant vigilance.
Timing is crucial in going short. Traders must accurately predict downturns, which can be influenced by various factors, including market sentiment, technical indicators, or external events. However, the volatile and unpredictable nature of the crypto market makes this a challenging endeavor. Notably, a stop loss is also a key instrument for risk-management.
A short position in the crypto context signifies a trader’s belief in an impending decrease in a cryptocurrency’s value. It’s not just a defensive strategy to hedge against potential losses but also a proactive approach to profit from market downturns. Despite its risks, seasoned traders often employ short positions as part of a diversified trading strategy, enabling them to leverage opportunities in all market conditions.
What Is Covering Shorts?
Covering shorts is a critical concept in crypto trading, particularly for those who engage in short selling. It refers to the process of buying back the borrowed cryptocurrency to close out a short position. This action is taken when a trader believes that the price of the cryptocurrency will no longer continue to decline, or to cut losses if the market moves against their prediction.
When a trader covers their shorts, they are essentially reversing the initial transaction. They buy the same amount of the cryptocurrency they initially borrowed and sold, aiming to do so at a lower price than they sold it for. This transaction concludes the short selling cycle. If the price is indeed lower, the trader profits from the difference; if higher, the trader incurs a loss.
“Market shorts” refer to the collective short positions held in the market. High levels of market shorts can indicate bearish sentiment, suggesting that many traders expect prices to fall. However, this can also lead to a “short squeeze,” where a sudden price increase triggers widespread covering of shorts, further driving up the price.
Long Position Vs. Short Position: When To Take It
Deciding between a long and a short position in crypto trading depends on several factors, including market analysis, risk tolerance, and investment horizon.
Traders should consider the current market trends and potential future developments. A long position might be more suitable in a bullish market or when positive developments are expected in the cryptocurrency space. On the other hand, a short position could be more effective during bearish market conditions or when negative news or trends are anticipated.
Short positions generally carry more risk due to the potential for unlimited losses. Traders with a lower risk tolerance may prefer long positions. Conversely, those willing to take on higher risk for potentially greater rewards might opt for short positions.
The choice between long and short positions also depends on the trader’s investment timeframe. Long positions are typically associated with a longer-term outlook, while short positions are often suited for short-term trading strategies.
Risk Management When Going Short
Risk management is particularly crucial when engaging in short selling due to the inherently high-risk nature of this strategy.
- Stop-Loss-Orders: One of the most important tools in managing risk while short selling is the use of stop-loss orders. These orders can help limit potential losses by automatically closing out a position if the cryptocurrency’s price moves unfavorably to a certain point.
- Hedging: Traders may also employ hedging strategies to mitigate risks associated with going short. This might involve diversifying their investment portfolio or using financial instruments like options or futures to provide a safety net against potential losses.
- Capital Management: Effective capital management is essential. This involves only allocating a portion of one’s capital to high-risk strategies like short selling, ensuring that a single bad trade does not significantly impact the overall trading capital.
Long/Short Strategies
In the volatile arena of crypto trading, long/short strategies are essential for traders to understand. These strategies, which involve navigating between long and short positions, are key to leveraging market movements and managing risk effectively.
Comparison: Long Position Vs Short Position In Trading
The decision to go long or short in crypto trading fundamentally depends on a trader’s market outlook and strategy.
- Long Vs. Short Position: A long position is taken with the expectation of a cryptocurrency’s price rising, reflecting a bullish outlook. In contrast, a short position is based on the anticipation of a price decline, indicative of a bearish market perspective.
- Risk Tolerance: The risk profiles of these positions differ significantly. Long positions, subject to market downturns, have a maximum loss limit (the asset can only drop to zero). Short positions, however, carry potentially unlimited risk, as there’s no cap on how high a cryptocurrency’s price can climb.
- Shorts vs Longs: The proportion of short positions versus long positions in the market can offer insights into overall market sentiment. A dominance of short positions might indicate bearish sentiment, whereas a prevalence of long positions suggests a bullish market.
Leverage When Going Short And Long
Leverage is a critical concept in crypto trading, especially when implementing long or short strategies. It allows traders to amplify their trading position beyond their actual capital, potentially increasing profits. However, it also escalates the risks, including the risk of liquidation.
Leverage in crypto trading means using borrowed funds to increase a trade’s exposure. For instance, using 10x leverage, a trader can open a position ten times the value of their actual investment. This can significantly amplify profits if the market moves in the trader’s favor. However, it also means that losses are magnified if the market moves against them.
A key risk when using leverage is liquidation. Liquidation occurs when the market moves against the leveraged position and the losses exceed the trader’s initial margin (the amount invested in the trade). If a trader’s position is close to being liquidated, they may be required to add more funds to their margin (a “margin call”) or risk having their position automatically closed by the exchange.
Long And Short Squeeze
A crucial aspect of long/short strategies is understanding the phenomena of long and short squeezes.
- Short Squeeze: This occurs when a sharp rise in the cryptocurrency’s price compels short sellers to buy back the asset to close their positions, often at a loss. This buying action can further drive up the price, amplifying the squeeze.
- Long Squeeze: Conversely, a long squeeze happens when a sudden drop in prices forces traders in long positions to sell their holdings, usually to limit losses. This selling pressure can further depress the cryptocurrency’s price.
These squeezes are significant market events that can lead to rapid and substantial price movements, impacting both individual trading strategies and overall market dynamics.
Position Trader Strategy In Crypto Markets
This strategy plays a unique role, often focusing on longer-term trends and strategies.
- Position Trader Strategies: These traders typically hold their positions over extended periods, basing decisions on long-term market trends rather than short-term fluctuations. This approach requires a deep understanding of market fundamentals and a patient, disciplined investment philosophy.
- Longer Position Approaches: In taking longer positions, position traders often weather short-term market volatility in anticipation of long-term gains. This strategy demands not only a thorough analysis of the cryptocurrency’s potential but also a steadfast approach to riding out market highs and lows.
Practical Guide To Long & Short Crypto
Successfully trading cryptocurrencies involves more than understanding market trends; it requires knowing how to effectively execute long and short positions. This practical guide provides insights into the mechanisms of long and short crypto trading, recommends platforms for these trades, and offers a detailed guide to short selling in the crypto world.
How To Long And Short Crypto?
The process of going long or short in crypto involves several key steps:
Market Analysis: Before taking any position, conduct thorough research. Analyze market trends, news, technical indicators, and any other relevant information that could impact the price of the cryptocurrency.
- Choosing A Position: If your analysis suggests an upcoming rise in the crypto’s value, you would buy (or ‘go long on’) the crypto with the intention of selling it later at a higher price. Conversely, if you anticipate a decrease in value, you would sell the crypto (or ‘go short’), ideally repurchasing it later at a lower price to profit from the difference.
- Order Execution: Use a crypto trading platform to place your order. For long positions, this will typically be a ‘buy’ order; for short positions, a ‘sell’ order. Advanced traders might use market, limit, or stop orders based on their strategy.
- Risk Management: Always implement risk management strategies like setting stop-loss orders or only investing what you can afford to lose, especially important in the highly volatile crypto market.
- Close The Position: Monitor the market closely and close your position when you have achieved your target profit or want to cut a loss. For long positions, this means selling your crypto; for short positions, buying back.
Best Crypto Platforms To Long & Short
Choosing the right platform is crucial for effective long and short trading. Here’s a list of the most renowned platforms:
- Binance Futures: Known as the most liquid crypto contract trading platform, Binance Futures offers futures contracts for a wide range of cryptocurrencies. It provides options of cross margin and isolated margin modes, with up to 125x leverage on selected trading pairs.
- Bybit: This global cryptocurrency exchange focuses on crypto futures contracts and also offers options trading and spot trading. It has futures settled in USDC and USDT stablecoins, as well as in the underlying cryptocurrency.
- BitMEX: A pioneering platform in crypto contract trading, BitMEX caters to experienced traders and provides access to perpetual swaps and futures contracts margined in BTC, USDT, and ETH.
- OKX: OKX offers a comprehensive suite of trading products including perpetual swaps, futures, and options. It also features competitive fees and a trading bot marketplace.
- Deribit: Dominant in crypto options contracts, especially for Bitcoin and Ethereum, Deribit is the preferred platform for institutional-grade crypto derivatives trading.
- BingX: This platform lists both perpetual and standard futures contracts settled in USDT, covering a wide selection of cryptocurrencies.
- Phemex: Phemex provides stablecoin-settled futures, coin-settled futures, and USD-settled futures. It also features a “hedge mode,” allowing traders to hold long and short positions simultaneously on the same contract.
FAQ: Long And Short Positions
What Is A Short Position?
A short position in crypto trading refers to selling a cryptocurrency that the trader does not own, with the expectation of buying it back later at a lower price. This strategy is used when the trader believes the price of the crypto will decrease.
What Is A Long Position?
A long position in crypto trading is when a trader buys a cryptocurrency with the expectation that its value will increase. It’s a strategy based on optimism about the asset’s future performance.
What Is The Difference Between A Long And Short Position?
The primary difference is in the market outlook. A long position reflects a bullish stance, expecting the asset’s value to rise. A short position, however, is bearish, predicting a decline in the asset’s value.
Selling Short Explained?
Selling short involves borrowing a cryptocurrency and selling it at the current market price. The trader then aims to buy it back at a lower price, return the borrowed coins, and keep the difference as profit.
Explain The Term ‘Short Position Meaning’ In The Context Of Crypto?
In the context of crypto, a short position means taking a trading stance where you anticipate a decrease in the cryptocurrency’s value. It involves selling the crypto now to buy it back at a lower price later.
What Is The Difference Between Long Vs Short Position?
The difference lies in market speculation. Going long is speculating on a price rise, while going short is speculating on a price drop. Both strategies have different risk profiles and market approaches.
What Are Long And Short Positions?
Long and short positions are trading strategies in cryptocurrencies. A long position bets on a price increase, while a short position bets on a price decrease.
How Do Long & Short Positions Affect The Crypto Market?
These positions can significantly impact market liquidity and price movements. A predominance of long positions can indicate bullish market sentiment, while a majority of short positions may signal a bearish outlook.
What Is The Difference Between Short Selling And Long Selling?
Short selling is selling a borrowed cryptocurrency with the plan to repurchase it at a lower price. Long selling, however, is simply selling a cryptocurrency that you own, expecting that its price will not rise further.
What Are Long Positions?
Long positions in crypto trading are when traders buy and hold a cryptocurrency, expecting its value to increase over time.
What Is A Short In Trading?
A short in trading refers to the practice of selling a borrowed asset (like a cryptocurrency) with the intention of buying it back at a lower price.
What Does ‘In Short Order’ Mean?
‘In short order’ typically means accomplishing something quickly or within a short period. In trading, it might refer to rapidly executed trades or market movements.
What Is Short In Trading?
In trading, going short means taking a position that profits from the decline in the price of an asset.
How To Long And Short Crypto?
To long crypto, buy and hold it expecting an increase in value. To short crypto, sell a borrowed cryptocurrency anticipating a decrease in its price. Both strategies require careful market analysis and risk management.
What Are Platforms To Short Crypto?
Platforms like Binance Futures, Bybit, BitMEX, OKX, and others offer the ability to short crypto. This is possible through various trading instruments like futures and options contracts.