Bitcoin’s Volatility
  • 30 May, 2021


Bitcoin’s Volatility is Your Opportunity



 


Bitcoin is once again in a period of high volatility. After hovering around the $55,000 mark for seemingly forever, the Bitcoin rollercoaster has restarted.


Ever since the Chinese crackdown on crypto sparked a mini-crash, Bitcoin and other cryptocurrencies have experienced high volatility not seen for a long time. 


Now, it has to be said, trading in highly volatile times isn’t for the faint-hearted. However, bitcoin’s volatility should be seen as an opportunity.


Bitcoin will always have the capacity to be highly volatile. With its fixed supply and endless spotlight trained on it, Bitcoin will have more volatile moments than most other cryptocurrencies. So, it is important to know how to trade its volatility.


The first important thing to know is that Bitcoin is at its most volatile around the weekend. During weekdays, traders have stocks and forex to focus on along with crypto. However, at weekends, there is generally no forex or stock trading meaning all the focus is on crypto. The higher the volumes then the greater the volatility.


As well as knowing when Bitcoin will be most volatile, you also need to know what causes volatility. In Bitcoin’s case, events like regulation changes, Institutional adoption, whale movements, crashing oil or dollar prices, even Elon Musks’ tweets, all can cause a big swing in Bitcoin price, and, if traded correctly, can lead to quick and big profits.


This leads us nicely to how to trade the volatility in Bitcoin. As always, it is important to buy in the dips. Price falls offer perfect opportunities to buy at a cheaper price than before. Now, how to recognise a dip and a buying or selling opportunity can be helped with looking at the charts. 


A buy or sell opportunity will occur when Bitcoin’s price breaks above or below resistance and support levels on a chart. These levels can be hourly, daily, monthly and more and their relevance depending on strategy. That is why it is important to have a strategy and goal in place that you commit to. If you fail to prepare, you prepare to fail.


Trading volatility can be stressful and anxiety-inducing for a newbie or unprepared traders. However, with some resilience and patience, the rewards for those that can spot and act upon a breakout, and successfully trade Bitcoin’s volatility, can be life-changing.


Learn to treat Bitcoin’s volatility as a friend and not a foe at Cointandem and start monetizing that volatility today.


 

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