How to Make Money with Bitcoin in Day Trading
Bitcoin at present has gained popularity as the best and most profitable cryptocurrency in the world. More and more people are buying and selling it every day. Bitcoin is extremely simple to use and completely anonymous. It usually takes a few minutes to create a bitcoin wallet and start using it immediately. Many traders have recently started wondering how to make money with Bitcoin and how to use it for trading operations on stock exchanges.
What Is Bitcoin?
Bitcoin (BTC) is a decentralized digital currency of the new generation. Satoshi Nakamoto developed the principles of virtual money in the early 2000s. Bitcoin exists only on the Internet, and no one controls it. This cryptocurrency is emitted due to the work of millions of computers around the world using specific software for calculating mathematical algorithms. It was conceived primarily as a means of fast payment between people from different countries to avoid transactions through banks.
Exchange operations on cryptocurrency exchanges are identical to trading speculations with stocks and shares. To make a profit, a trader needs to buy cheap and sell at a higher price. This is the easiest way how to make money with Bitcoin. That is, it is similar to the investment in conventional currencies or fiat money.
The basic tools and the principle of setting targets are similar as in trading securities and various assets. For trading BTC successfully, traders should know the basics of trading stocks, securities, and national currencies. The primary components for making money with Bitcoin are charts, selling and buying orders, history of transactions, and trading volumes on an exchange.
Bitcoin Price Prediction for Day Trading
It is difficult to predict the Bitcoin rate. No one can tell with absolute certainty what will happen with this crypto coin tomorrow. So, how to make money with Bitcoin? The essential factors that experts rely on are Bitcoin’s history and price levels over the entirety of its existence. Knowledge of what has occurred to the coin allows us to understand what may happen to it in the future.
The first official exchange rate for Bitcoin to US dollar was established in October 2009. Then, it was possible to buy 1.309 BTC for 1 USD. Many people today regret that they missed investing in Bitcoin at that time and getting it for a penny. No one could have envisioned that the cost of 1 BTC would increase to almost $20,000 at the end of 2017. Since the beginning of 2018, the rate began to fall and dropped to $2,800 in October 2018.
Experts have voiced various reasons for the last BTC drop. Some of them have said that this was a natural correction in the profit-taking process. Others referred to the statements of opinion leaders. So, Emil Oldenburg, one of the principal creators of the first cryptocurrency, doubted the possibility of making money with Bitcoin. He sold off all his crypto savings and called such an investment too risky. The Minister of Finance of Japan, where Bitcoin was legalized in 2016, supported this opinion and called BTC an unreliable asset. Today, the Bitcoin rate hovers around 10,000 BTC per $1. So, what to expect then? Will Bitcoin crash? Nobody knows. The best sources of news are thematic forums and blogs, where experts often post their thoughts and predict the Bitcoin rate.
How to Get Bitcoins for Day Trading?
Some time ago, a popular method of making money with Bitcoin was mining this cryptocurrency using graphics processors. However, the complexity of crypto production has increased over time, and this has led to excessive consumption of electric power. It is currently easier to invest in Bitcoin since it is purchased on a number of exchanges.
A cryptocurrency exchange is a platform for trading and exchanging digital crypto coins for one another, as well as for various global fiat currencies, such as US dollars, euros, etc.Day Trading with Bitcoins: Pros and Cons
Day trading with Bitcoins has several advantages. First, the Bitcoin rate is very variable. In other words, a trader can make a good profit if the market movement is predicted. Secondly, unlike traditional markets, Bitcoin trading is conducted around the clock, seven days a week. Most of the conventional trades using stocks or goods are held in a strictly allotted time. With Bitcoin, a trader can buy and sell assets at any time. Thirdly, the unregulated nature of Bitcoin simplifies the trading process, because traders don’t need to go through a complicated authentication process to start trading.
However, cryptocurrencies have several disadvantages for day trading operations. That is, the rates of cryptocurrencies are very dependent on news and many experts’ opinions. It is difficult to find reliable and informative forecasts on the Internet how to make money with Bitcoin. Some “gurus” can make a Bitcoin price prediction purposely to increase or decrease demand. Even using both fundamental and technical analysis, nobody can precisely state what is going to be with this or that crypto coin and whether Bitcoin will crash or not.
How to Day Trade Bitcoin?
A day trader has a set of methods on how to make money with Bitcoin using the BTC/USD pair. Due to the strong volatility and hype around this cryptocurrency, buying on corrections is currently one of the most profitable trading strategies. A profit can be made regardless of whether the trend is directed up or down.
A day trader makes many transactions during a day and aims to receive benefits from short-term price movements. The critical moment in day trading is the presence of volatility and a large number of potentially lucrative offers. Many trading platforms provide special software that allows traders to observe the history of rate changes and apply technical analysis to their transactions.
One of the primary issues in cryptocurrencies trading is an understanding of the trends and their price movement. A trend is a channel resulting from both resistance and support. The slope of these levels determines the direction of the trend movement. If it is directed upwards, then the trend is called an upstream. This means that the trade is conducted with a predominance of purchases. The opposite is valid for a downstream.
A side trend is a movement in which the levels of resistance or support are arranged horizontally. So, the amount of sales and purchases are approximately equal.
However, the reality is not as rosy as it seems, and the question of how to make money with Bitcoin is still relevant. Many people will ask Bitcoin crash and when. At the same time, a lot of traders consider crypto trading the least favored for trading on exchanges.
Is It a Good Idea to Invest in Bitcoin?
Cryptocurrency trading has a short history compared to transactions using stocks, shares, and other assets, where key levels have been formed for decades. At the time Bitcoin grew continuously in value, trading was simply a matter of buying cryptocurrency momentarily, waiting a bit, and then taking the profit. It was an unusual method of how to make money with Bitcoin.
However, trends don’t last forever. When an upstream movement stops, many traders are unable to notice in time that something has changed. They predictably continue to trade the same way as before and wonder why their transactions cease to be profitable. In the end, an inexperienced Bitcoin trader may lose everything earned or more. Traders make money on volatility, but when it is too high, it creates a significant level of uncertainty. When the price continually rises and falls, finding good entry or exit points becomes more difficult. At the same time, a trader has less time to make a informed decisions.
Matters regarding how to make money with Bitcoin is clear theoretically. However, many traders who have long dealt with stocks, futures, and options are in no hurry to invest in Bitcoin. Current instruments and a wide range of assets fully satisfy their needs in order to be successful at day trading on stock exchanges. So, should you switch to trading cryptocurrencies? Each trader should make this decision independently, taking into account the previously stated arguments with a grain of salt.