Artículos (5)
How to trade crypto
<p>Crypto trading is surrounded by a lot of myths that scare away many people. Some think it’s expensive; others are concerned about its unpredictability. Quite often, these myths stem from a lack of understanding of cryptocurrency’s nature. After all, the cryptocurrency market is different from other financial markets. For one, cryptocurrencies have no physical form, so they can't change hands like gold or foreign currencies.<br /> <br /> In this article, we’ll explain the difference between crypto trading and investing and focus on one of the most popular ways to trade crypto – CFD trading. If you need to brush up on the basics of crypto, you can check out our <a href="/en/trading-academy/crypto/what-is-cryptocurrency">What is cryptocurrency, and how does crypto work</a> article before diving into cryptocurrency trading.</p> <h2>Crypto trading vs crypto investing</h2> <p> When looking to gain access to the crypto market, there are three possible scenarios to choose from: <br /> </p> <p>1. Buy and hold for an extended period of time to profit from the price increase.<br /> <br /> 2. Buy and sell regularly to profit from small price increases – crypto day trading.<br /> <br /> 3. Trade on the price movements with derivatives like CFDs.<br /> </p> <p paraeid="{4ae88016-a75c-44a6-af82-0cf7723ac87b}{215}" paraid="2140074582">Whenever buying the asset outright, as is the case with option 1, that's know as investing, and it can require substantial investment to make a considerable profit. It’s a strategy that has worked well for many when Bitcoin’s price was steadily climbing. However, investors are also the first to take the hit when crypto prices drop. <br /> </p> <p paraeid="{d7a63124-0b4c-4d34-80ee-1a17bba0613f}{28}" paraid="1728185531">The second and third options – trading cryptocurrency with CFDs, requires a much smaller amount of capital to start and can be beneficial even during crypto crashes. Moreover, CFD traders don't need to worry about having a crypto wallet or guarding their private key – they only need a trading account with an online broker.</p> <p><br /> <br /> <img alt="" src="/getmedia/40c7c01b-71b7-4c56-b2c9-c5fff357b984/article-how-to-trade-crypto-trading-vs-investing.webp" /></p> <h2>How to trade crypto with CFDs</h2> <p>Contracts for difference, or CFDs, are one of the most popular forms of derivative trading – allowing you to speculate on price movements without owning the underlying asset. If you are not familiar with derivative trading, check out our <a href="/en/trading-academy/cfds/what-are-cfds">CFD trading: a beginner’s guide</a><a href="/en/trading-academy/cfds/what-are-cfds"> </a>where we explain it in detail.</p> <p paraeid="{d7a63124-0b4c-4d34-80ee-1a17bba0613f}{120}" paraid="428144058">Many traders open and close contracts within the same day to avoid trading fees for holding a contract open overnight. However, although CFDs do incur overnight fees, they do not expire and can be used for a long-term strategy. </p> <p paraeid="{d7a63124-0b4c-4d34-80ee-1a17bba0613f}{164}" paraid="2122396469">When you trade on a cryptocurrency or any other financial market with CFDs, you can open two types of positions: long or short. </p> <h3>Going long</h3> <p>Traders open long (buy) positions when their research indicates that the price will increase. Let's say you decide to trade on Bitcoin. The current price is USD 22,500. You open a long position, and the price goes up to USD 22,600. The difference – USD 100 – is your profit. If the price drops to 22,400 instead, the USD 100 would become your loss.<br /> <br /> <img alt="" src="/getmedia/86eb405f-c7a7-4f80-91ba-8afdd17618ed/article-how-to-trade-crypto-long.webp" /></p> <h3>Going short</h3> <p>In a reverse scenario, when traders anticipate the price to drop, they open short (sell) positions. Let's say your research says that Bitcoin will depreciate soon, and you open a short position. Since you don't own any Bitcoin when you trade CFDs, you are not actually selling it; it's just that – opening a sell contract.<br /> <br /> If the price drops to USD 22,400, the USD 100 difference is your profit. However, if your research was incorrect and the price goes up to USD 22,600 instead, the USD 100 becomes your loss.<br /> <br /> <img alt="" src="/getmedia/948368c3-9740-4b83-a7f1-f687a12f1053/article-how-to-trade-crypto-short.webp" /><br /> <br /> To protect themselves from sudden unexpected price jumps, traders use risk management tools, such as stop loss and take profit. We explain how they work in our CFD trading guide, too.</p> <h2>What are the benefits of trading crypto with CFDs?</h2> <p>Crypto CFD trading is quickly gaining popularity for various reasons. Here are some of them:</p> <h3>Demo account</h3> <p>While you can't practice buying crypto, you can always create a demo account to test your CFD trading skills. Almost every trading platform nowadays offers free-of-charge and <a href="/en/demo-account">risk-free demo accounts</a> with functionality identical to real money accounts.</p> <h3>Leverage</h3> <p>CFD trading usually comes with leverage – borrowed funds from a broker to open larger positions. Depending on how big your leverage is, all you need to do is put down a small deposit, called a margin, to open a trade. If your trade is successful, your profit multiplies. However, in a losing trade, the loss multiplies too. That's why using risk management tools is crucial in every trading strategy.</p> <h3>Weekend trading</h3> <p>Since cryptocurrencies are not subject to following any centralised institutions, the crypto market is available for trading round the clock, even when the other markets are closed.</p> <h3>Trading on rising and falling markets</h3> <p>As you can see in our previous example, it doesn't matter whether the price goes up or down – for a CFD trader, both options are good. That's why when crypto owners hold their breath during yet another roller coaster ride their cryptocurrency experiences, CFD traders welcome both dips and rises with open arms.</p> <h3>Multiple trading opportunities</h3> <p>Those rollercoaster rides happen quite often – the market is relatively new and very volatile. When you trade crypto with CFDs, the more often the prices go up and down, and the bigger the swings are, the more trading opportunities it presents. However, rapid price movements can potentially result in losses too. That's why, as we mentioned previously, using <a href="/en/trading-academy/cfds/risk-management-tools-in-cfd-trading">risk management tools in CFD trading</a><a href="/en/trading-academy/cfds/risk-management-tools-in-cfd-trading"> </a>is extremely important.</p> <h2>Most popular cryptocurrencies to trade</h2> <p>The list of the most popular cryptocurrencies is very fluid, as some coins fall in and out of favour for one reason or another.<br /> <br /> Here are some of the most popular cryptocurrencies that are often mentioned in the top 5 and top 10 lists:<br /> </p> <ul> <li>Bitcoin (BTC)</li> <li>Ethereum (ETH)</li> <li>Binance coin (BNB)</li> <li>Ripple (XRP)</li> <li>Cardano (ADA)</li> <li>Dogecoin (DOGE)</li> </ul> <p><br /> Keep in mind that for CFD traders, the actual investment you make plays a less important role than for investors because CFD trades are leveraged. For example, with ThinkMarkets, you can trade Bitcoin CFDs with up to 50:1 leverage. This means that you only need to deposit 1/50th of its price to open a position.<br /> <br /> <img alt="" src="/getmedia/fcc0aad4-48bf-4bc0-bb8e-4ae92023bdb8/article-how-to-trade-crypto-capital.webp" /><br /> <br /> Moreover, if the required capital is larger than you are ready to allocate for a trade, you can always open smaller trades – as small as 0.01 of a full lot (which is one Bitcoin), and you'd need just a small amount for a deposit.<br /> <br /> Smaller trades usually work well for beginner traders, allowing them to practice using risk management tools without risking too much of their budget. Another alternative for beginners is to open a demo account and practice trading with virtual funds.<br /> <br /> Demo accounts can also be very useful for testing trading strategies. However, to build a good strategy, a trader first needs to understand what exactly drives the cryptocurrency prices up or down to avoid missing trading opportunities. Head to our <a href="/en/trading-academy/crypto/what-affects-crypto-prices">What affects crypto prices</a> article, to find out the main factors behind crypto volatility.</p>
Cómo operar CFDs de criptomonedas el fin de semana
<p>El mercado de criptomonedas es conocido por su naturaleza continua, lo que permite a los traders operar las 24 horas del día, los 7 días de la semana. Para aquellos interesados en operar CFDs (Contratos por Diferencia) de criptomonedas los fines de semana, las oportunidades y los riesgos pueden diferir del trading regular de criptomonedas. Este artículo explora cómo puedes operar CFDs de criptomonedas de manera efectiva durante el fin de semana y presenta los beneficios y estrategias para maximizar tu potencial.</p> <h2>¿Qué son los CFDs de criptomonedas?</h2> <p>Los CFDs de criptomonedas son instrumentos financieros que te permiten especular sobre los movimientos de precios de las criptomonedas sin necesidad de poseerlas. Al operar un CFD, estableces un contrato con un broker para intercambiar la diferencia en el precio de una criptomoneda entre la apertura y el cierre de la posición, lo que hace posible operar tanto en mercados al alza como a la baja.</p> <h2>¿Por qué operar CFDs de criptomonedas los fines de semana?</h2> <p>El trading de CFDs durante los fines de semana ofrece varias ventajas y conlleva riesgos únicos del mercado de fin de semana. Los CFDs permiten operar con <strong>apalancamiento</strong>, es decir, abrir posiciones más grandes con una inversión inicial menor. Esto puede generar ganancias significativas si el mercado se mueve a tu favor, pero también aumenta el riesgo de pérdidas.</p> <p>Además, operar CFDs en fines de semana permite <strong>flexibilidad</strong> para quienes tienen horarios de semana ocupados y brinda la posibilidad de reaccionar a movimientos de precios que ocurren en horas fuera del mercado tradicional.</p> <p>Los fines de semana pueden presentar una <strong>mayor volatilidad</strong> debido a menores volúmenes de trading y menos participantes en el mercado, lo cual puede ofrecer oportunidades para aquellos que saben manejar sus riesgos. Además, los traders de CFDs pueden beneficiarse de precios en alza y a la baja, lo que puede ser ventajoso en momentos de movimientos impredecibles.</p> <p>Con los CFDs, puedes obtener ganancias tanto en mercados alcistas (bull) como bajistas (bear), lo que genera más oportunidades para beneficiarse de la alta volatilidad, sin importar si los precios suben o bajan.</p> <p>Finalmente, operar con CFDs elimina la necesidad de poseer la criptomoneda subyacente, lo que te permite especular sobre el precio sin preocuparte por el almacenamiento, la gestión de billeteras criptográficas o la seguridad de tus activos.</p> <h2>¿Dónde puedes operar CFDs de criptomonedas los fines de semana?</h2> <p>Brokers como ThinkMarkets ofrecen acceso 24/7 al trading de CFDs de criptomonedas, incluidos los fines de semana. Por ejemplo, con ThinkMarkets puedes operar diversas criptomonedas, como Bitcoin y Ethereum, con apalancamiento para aprovechar los movimientos de precios de fin de semana.</p> <p>La operación de CFDs de criptomonedas se realiza a través de una plataforma de trading, y ThinkTrader es la plataforma ideal para el trading de CFDs de criptomonedas con ThinkMarkets. Con sus herramientas avanzadas de gráficos, funciones de gestión de riesgos y una interfaz fácil de usar, la plataforma ofrece una experiencia de trading más fluida. Además, permite automatizar tus estrategias de trading, para que no tengas que monitorear el mercado constantemente.</p> <h2>Riesgos de operar CFDs de criptomonedas los fines de semana</h2> <p>Durante los fines de semana, la <strong>liquidez puede ser significativamente menor</strong> debido a una menor participación de traders, lo que puede llevar a spreads más amplios, encareciendo la apertura y cierre de posiciones. También significa que las operaciones grandes pueden tener un mayor impacto en los precios de mercado, lo que a menudo genera deslizamiento.</p> <p>El trading con <strong>apalancamiento</strong> amplifica tanto las ganancias como las pérdidas. Aunque el apalancamiento puede aumentar los rendimientos potenciales, también eleva el riesgo de pérdidas significativas. Durante los fines de semana, operar con apalancamiento requiere una cuidadosa gestión de riesgos para evitar resultados indeseados.</p> <p>Los <strong>gaps de precios</strong> pueden ser más frecuentes en los fines de semana, especialmente en horas de bajo volumen. Un gap de precio ocurre cuando el precio del mercado cambia significativamente hacia arriba o abajo, sin operaciones en el medio, lo que puede resultar en la ejecución de tus órdenes stop-loss a un precio menos favorable.</p> <h2>Estrategias para operar CFDs de criptomonedas los fines de semana</h2> <p><strong>El swing trading</strong> es una estrategia popular para operar los fines de semana. Implica mantener una posición durante varias horas o días para captar oscilaciones de precios. Con el swing trading, puedes aprovechar los movimientos de precios a corto plazo que ocurren en esos períodos. Usar indicadores técnicos como las Bandas de Bollinger y las Medias Móviles puede ayudarte a identificar puntos de entrada y salida.</p> <p>Si ya tienes una posición en criptomonedas, puedes usar CFDs para protegerte (hacer <strong>hedging</strong>) de posibles pérdidas. Por ejemplo, si posees Bitcoin y te preocupa una posible caída en su precio durante el fin de semana, puedes abrir una posición corta para compensar cualquier pérdida. La cobertura te ayuda a proteger tus inversiones en momentos de incertidumbre.</p> <p>Los <strong>bots de trading automatizado</strong> pueden ser especialmente útiles para operar con CFDs los fines de semana. Muchas plataformas permiten configurar bots que ejecutan operaciones en función de parámetros predeterminados, lo cual es beneficioso para manejar los rápidos movimientos de precios que pueden ocurrir los fines de semana. Además, los bots automáticos pueden ayudar a eliminar el sesgo emocional en tus decisiones de trading.</p> <p>El trading de los fines de semana a menudo genera la formación de rangos de precios. El <strong>range trading</strong> implica identificar niveles de soporte y resistencia y operar dentro de ese rango. Esta estrategia puede ser efectiva si notas que el precio rebota entre dos niveles, lo que te permite comprar en soporte y vender en resistencia.</p> <h2>5 consejos para un trading exitoso de CFDs de criptomonedas en fin de semana</h2> <h3>Usa órdenes de stop-loss y take-profit</h3> <p>Estas herramientas ayudan a gestionar el riesgo al cerrar automáticamente tus posiciones una vez alcanzados los niveles de ganancia o pérdida predefinidos. Dada la imprevisibilidad del mercado de fin de semana, configurarlas puede ayudar a proteger tu capital.</p> <h3>Sigue noticias clave del mercado</h3> <p>Los mercados de fin de semana pueden ser influenciados por eventos noticiosos, como anuncios regulatorios o desarrollos inesperados en el espacio cripto. Mantente informado a través de sitios de noticias de criptomonedas y redes sociales para reaccionar rápidamente a eventos importantes.</p> <h3>Evita el uso excesivo de apalancamiento</h3> <p>Aunque el apalancamiento puede ser tentador en tiempos de alta volatilidad, es esencial usarlo con precaución. El apalancamiento excesivo puede llevar a pérdidas mayores si el mercado va en tu contra.</p> <h3>Monitorea los spreads</h3> <p>Como se mencionó, los spreads pueden ampliarse los fines de semana, así que asegúrate de revisarlos antes de colocar tu operación. Los spreads altos significan costos más altos, por lo que es importante incluirlo en tu estrategia.</p> <h3>Usa herramientas de análisis técnico</h3> <p>Herramientas como el RSI (Índice de Fuerza Relativa), MACD (Media Móvil de Convergencia/Divergencia) y los retrocesos de Fibonacci pueden ayudarte a identificar oportunidades de trading. Estas herramientas son útiles los fines de semana, cuando el análisis fundamental puede ser menos efectivo debido a la menor cantidad de participantes.</p>
Beyond Bitcoin: Trading Altcoins During the BTC Halving Event
<p>The Bitcoin Halving is a momentous event in the world of cryptocurrencies. Occurring every four years, it reduces the reward for mining Bitcoin transactions by half in an effort to control the supply of BTC. This mimics the scarcity-driven value preservation similar to precious metals such as gold and silver.<br /> <br /> The Halving event separates BTC from fiat currencies where central banks and governments can simply print more money and thus subject to inflationary pressure. The mechanism has been known to significantly influence the price of BTC as investors see long-term value in the coin. Learn more about what the Bitcoin Halving Event is here.<br /> <br /> However, the Bitcoin Halving event is not isolated on BTC charts. In the case of Ethereum, for instance, traders and investors have fixed ideas of how much one ETH should be worth against BTC. If BTC gains by X, then ETH also needs to gain by X amount.<br /> <br /> In this article, we’ll discuss the ripple effect of Bitcoin Halving among altcoins, such as Ethereum (ETH), Ripple (XRP), Cardano (ADA), and Binance Coin (BNB).<br /> <br /> As Bitcoin is arguably the most popular cryptocurrency, it’s no wonder that all altcoins have strong ties to it. BTC price movements, such as dumps, regulations and br eaking news, have an influence on altcoins.</p> <h2>Bitcoin Halving event’s effect on Altcoins</h2> <p>The Halving event often triggers speculative activity. The reduced supply post-halving has historically led to price increases, drawing investor attention not only to Bitcoin, but also to altcoins as alternative investment opportunities.<br /> <br /> Bitcoin miners may also shift their attention towards more profitable altcoins as BTC decreases their rewards. This influx affects the mining dynamics, security, and transaction processing speed of an altcoin’s network, increasing its investor appeal and valuation.<br /> <br /> Lastly, the media coverage surrounding the Bitcoin Halving event increases the mass appeal of cryptocurrencies. The heightened public interest attracts new investors, some of which may prefer exploring altcoins over Bitcoin and expanding the cryptocurrency world’s general liquidity.<br /> <br /> Let’s look at the price movements of famous altcoins ETH, XRP, ADA, and BNB during the third Bitcoin Halving event.</p> <h2>Third Halving (May 2020)</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>Coin</td> <td>Feb 2020</td> <td>Mar 2020</td> <td>Apr 2020</td> <td>May 2020</td> <td>Jun 2020</td> <td>Jul 2020</td> <td>Aug 2020</td> </tr> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>ETH</td> <td>$217.43</td> <td>$132.80</td> <td>$206.18</td> <td>$231.69</td> <td>$225.59</td> <td>$346.38</td> <td>$434.06</td> </tr> <tr> <td>XRP</td> <td>$0.21150</td> <td>$0.21150</td> <td>$0.17530</td> <td>$0.25940</td> <td>$0.28110</td> <td>$0.24180</td> <td>$0.23780</td> </tr> <tr> <td>ADA</td> <td>$0.0471</td> <td>$0.0305</td> <td>$0.0474</td> <td>$0.0743</td> <td>$0.0832</td> <td>$0.1390</td> <td>$0.1224</td> </tr> <tr> <td>BNB</td> <td>$19.25</td> <td>$12.55</td> <td>$17.02</td> <td>$17.12</td> <td>$15.41</td> <td>$20.67</td> <td>$23.14</td> </tr> </tbody> </table> <h2>Ethereum (ETH) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>Coin</td> <td>Feb 2020</td> <td>Mar 2020</td> <td>Apr 2020</td> <td>May 2020</td> <td>Jun 2020</td> <td>Jul 2020</td> <td>Aug 2020</td> </tr> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>ETH</td> <td>$217.43</td> <td>$132.80</td> <td>$206.18</td> <td>$231.69</td> <td>$225.59</td> <td>$346.38</td> <td>$434.06</td> </tr> </tbody> </table> <p>Ethereum's price movements around the Bitcoin halving in May 2020 show a significant trend. Before the Halving, ETH experienced a dip in March 2020. It should be noted that this was a global phenomenon. Financial markets crashed due to the imposed lockdowns caused by COVID-19.<br /> <br /> However, as the Halving approached, ETH began to recover, with the price in April bouncing by a whopping 55.26%. Just three months after the Halving, ETH showed a substantial increase in value, averaging $434.06, an 87.35% climb.<br /> <br /> This price movement indicates that Ethereum is considered as a complementary asset to Bitcoin, with its own fundamentals but ultimately, still riding the wave of increased crypto valuation.</p> <h2>Ripple (XRP) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>XRP</td> <td>$0.21150</td> <td>$0.21150</td> <td>$0.17530</td> <td>$0.25940</td> <td>$0.28110</td> <td>$0.24180</td> <td>$0.23780</td> </tr> </tbody> </table> <p>Ripple (XRP) also suffered from the economic uncertainty caused by the COVID-19 lockdowns. There was a steady decrease in price from February to March. However, during the month of the Bitcoin Halving Event, XRP’s price surged by 47.97%, averaging $0.25940 in May.<br /> <br /> Following the event, XRP continued to experience moderate volatility, experiencing an uptick in June before declining in the months after. This pattern suggests that while XRP does react to Bitcoin's Halving event, it also operates under the influence of its own market dynamics and fundamentals.</p> <h2>Cardano (ADA) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>ADA</td> <td>$0.0471</td> <td>$0.0305</td> <td>$0.0474</td> <td>$0.0743</td> <td>$0.0832</td> <td>$0.1390</td> <td>$0.1224</td> </tr> </tbody> </table> <p>Cardano (ADA) had a positive response around the third Bitcoin Halving event. Before the event, ADA was relatively stable, averaging $0.0471 and $0.0474. However, in the immediate aftermath of the Halving, ADA’s price significantly jumped by 56.75%.<br /> <br /> ADA’s positive correlation with the Bitcoin Halving event continued in the following months, with ADA averaging $0.1224, a 158.23% jump just three months after. This strong performance could indicate increased investor confidence in alternative cryptocurrencies and a search for potential high-growth assets within the crypto space.</p> <h2>Binance Coin (BNB) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>BNB</td> <td>$19.25</td> <td>$12.55</td> <td>$17.02</td> <td>$17.12</td> <td>$15.41</td> <td>$20.67</td> <td>$23.14</td> </tr> </tbody> </table> <p>Binance Coin’s performance around the Bitcoin Halving event shows an interesting trend. BNB started strong with $19.25 in February before experiencing a market downturn in March. By April, it was in a recovery phase before dropping again in price after the Halving.<br /> <br /> However, two months after the Halving, there was a notable rise with July and August showcasing then all-time highs. This upward trajectory suggests that BNB, with its ties to the Binance exchange ecosystem, benefits from the increased trading activity and investor interest that often accompany Bitcoin halving events.<br /> <br /> The role of market sentiment cannot be understated, especially in the cryptocurrency industry. As Bitcoin's Halving generates media buzz and fosters discussions about scarcity and value, investor behaviour leans towards optimism.<br /> <br /> This sentiment is then mirrored in the altcoin markets, where investors, expecting a similar scarcity-induced appreciation, may turn their attention to altcoins like ETH, XRP, ADA, and BNB. The market historically witnesses a surge in trading volumes and, consequently, prices across a range of cryptocurrencies, as investors diversify their portfolios in search of gains.<br /> <br /> It is important, however, to note that while there is a correlation, it is not a direct causation. Altcoins are influenced by their own unique set of factors, and Bitcoin's halving is just one of them. Each altcoin has its unique ecosystem and fundamentals that play a significant role in its price determination. For instance, Ethereum's shift to Ethereum 2.0 and its proof-of-stake model is an intrinsic value proposition that can affect its price independently of Bitcoin's Halving events.<br /> <br /> Access a wide range of cryptocurrency coins when you sign up with ThinkMarkets. Conquer the market and identify trading opportunities with our advanced charting interface, powerful tools, and exclusive features now!</p>
Decoding Bitcoin Halvings: A Historical Look at Price Patterns
<p paraeid="{be5484a1-04bf-49d6-9422-2c52efe2209d}{207}" paraid="521337786">The Bitcoin Halving event is a scheduled protocol that occurs every 4 years in the Bitcoin blockchain system that cuts a miner’s rewards by half, effectively controlling the supply inflation. </p> <p paraeid="{be5484a1-04bf-49d6-9422-2c52efe2209d}{217}" paraid="1738663072">The first three Bitcoin Halving events had a significant impact on the cryptocurrency market’s history. If you’re looking to trade the 2024 Bitcoin Halving event, it’s crucial to look at historical data and identify any similar patterns. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>Halving Event</td> <td>Date</td> <td>Block Reward Before Halving</td> <td>Block Reward After Halving</td> </tr> <tr> <td>1st Halving</td> <td>November 2012</td> <td>50 BTC</td> <td>25 BTC</td> </tr> <tr> <td>2nd Halving</td> <td>July 2016</td> <td>25 BTC</td> <td>12.5 BTC</td> </tr> <tr> <td>3rd Halving</td> <td>May 2020</td> <td>12.5 BTC</td> <td>6.25 BTC</td> </tr> </tbody> </table> <p paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{134}" paraid="2060973884">Here, we’ve outlined the historical price movements of Bitcoin. We’ll be looking at the average closing price of BTC 3 months before and after the Halving event. </p> <p paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{160}" paraid="1748032745">All data is from StatMuse. </p> <h2 paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{170}" paraid="1354479776">First Halving (November 2012) </h2> <p paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{180}" paraid="1722657036">Leading up to the first Halving, Bitcoin's price saw gradual increases. In the months that followed, the price experienced significant growth, marking the beginning of a prolonged bullish phase. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>August 2012</td> <td>September 2012</td> <td>October 2012</td> <td>November 2012</td> <td>December 2012</td> <td>January 2013</td> <td>February 2013</td> </tr> <tr> <td>$10.91</td> <td>$12.36</td> <td>$11.77</td> <td>$12.45</td> <td>$13.33</td> <td>$15.38</td> <td>$25.58</td> </tr> <tr> </tr> </tbody> </table> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{43}" paraid="930690934">The initial Halving event set a precedent for how Bitcoin's price could respond to reduced block rewards. In the short term, volatility was evident, with price fluctuations leading up to and immediately following the Halving. </p> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{69}" paraid="2110744758">However, the long-term effect was a substantial increase in Bitcoin's price. This trend was attributed to the reduced rate of new Bitcoin entering the market, creating a scarcity that, alongside growing awareness and adoption of Bitcoin, drove prices up significantly over the following year. </p> <h2 paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{79}" paraid="1374391257">Second Halving (July 2016) </h2> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{93}" paraid="161665470">The period before the second Halving was characterised by steady growth. Post-Halving, the price initially remained stable before embarking on a notable upward trajectory, eventually leading to unprecedented highs in late 2017. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>April 2016</td> <td>May 2016</td> <td>June 2016</td> <td>July 2016</td> <td>August 2016</td> <td>September 2016</td> <td>October 2016</td> </tr> <tr> <td>$448.32</td> <td>$461.95</td> <td>$642.87</td> <td>$661.36</td> <td>$579.59</td> <td>$605.85</td> <td>$700.97</td> </tr> <tr> </tr> </tbody> </table> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{219}" paraid="800232351">Similar to the first, the second Halving event was followed by a period of short-term volatility. However, the long-term trend was overwhelmingly positive. The year following the Halving saw a remarkable bull run, culminating in a then-all-time high towards the end of 2017 ($4,006.03). </p> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{231}" paraid="1433194142">This surge was fueled by increased investor interest, the growing utility of Bitcoin, and broader market speculation. </p> <h2 paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{237}" paraid="254152464">Third Halving (May 2020) </h2> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{251}" paraid="648731874">Prior to the third Halving, Bitcoin's price was recovering from a market downturn, presumably due to the COVID lockdowns. Following the Halving, the price stabilised and then surged, contributing to a bull market that peaked in early 2021. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>February 2020</td> <td>March 2020</td> <td>April 2020</td> <td>May 2020</td> <td>June 2020</td> <td>July 2020</td> <td>August 2020</td> </tr> <tr> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,501.01</td> <td>$11,653.75</td> </tr> <tr> </tr> </tbody> </table> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{134}" paraid="894512290">The most recent Halving event occurred during a year marked by global economic uncertainty caused by the COVID-19 virus. Despite initial concerns, Bitcoin's price not only remained stable but also began a significant upward trend in the months following the Halving. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{148}" paraid="851095680">This growth continued into 2021, reaching new all-time highs, with BTC peaking at $69k. The third Halving solidified the notion that such events are a precursor to bullish market cycles for Bitcoin, driven by a combination of scarcity and increasing demand. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{156}" paraid="795444340">These analyses highlight a pattern of increasing interest and investment in Bitcoin around Halving events, often resulting in significant price movements. Market sentiment and investor behaviour play critical roles in shaping the price movements of Bitcoin around Halving events. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{184}" paraid="1273263002">Each Halving has been accompanied by a mix of speculative anticipation and strategic investment, influencing short-term volatility and long-term price trends. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{194}" paraid="1905781713">In conclusion, the last three Halving events have demonstrated a pattern of volatility followed by a long-term bullish trend. It’s essential that traders looking to follow the Bitcoin Halving event do extensive market research before opening short or long positions. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{210}" paraid="438273659">Trade the 2024 Bitcoin Halving Event with a safe and secure broker now. Experience 24/7 trading, instant execution, and high leverage. Portal.thinkmarkets.com </p>
Navigating the 2024 Halving: How to Trade Bitcoin's Big Event
<p paraeid="{5a322cb4-ebc8-4477-bc6a-908a3b9a4601}{227}" paraid="1424858045">As April 2024 approaches, the term Bitcoin Halving is gaining extra traction. Crypto traders and enthusiasts alike are waiting in bated breath for the Halving event’s impact not just on BTC’s price, but on altcoins as well. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{2}" paraid="2102964511">But what exactly is Bitcoin Halving and why is it important? In simple terms, it is an event hardcoded into Bitcoin’s blockchain protocol which reduces a miner’s rewards by half every four years. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{18}" paraid="608511683">This event adds a scarcity element into the cryptocurrency generating massive appeal and significantly affects the price of BTC. For more information on Bitcoin Halving, read our beginner’s guide here. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{24}" paraid="1312720657">Historically, the last three Bitcoin Halving events which happened in 2012, 2016, and 2020 have caused both short- and long-term volatility. Read here to get a comprehensive overview of BTC’s price during the first three Halvings. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{38}" paraid="1137844410">In this article, we’ll go through some insights on how to trade the 2024 Bitcoin Halving event. <br /> </p> <h2>Preparing for the 2024 Halving</h2> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{60}" paraid="50837725">As the 2024 Bitcoin Halving approaches, there is widespread anticipation for a bullish run. Diving into the historical data and examining how previous Halvings impacted the price of Bitcoin and other altcoins can help identify patterns. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{86}" paraid="406758674">Do you have a trading strategy in plan? Check out how they would’ve fared during the past Halving events using <a href="/en/learn-to-trade/articles/traders-gym/" rel="noreferrer noopener" target="_blank">Traders’ Gym</a>, our backtesting tool, exclusively available on ThinkTrader Web. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{105}" paraid="302886376">Additionally, it’s crucial to keep an eye out for crucial developments within the Bitcoin ecosystem, such as changes in mining technology or regulatory updates. <br /> </p> <h2>Basic Tools and Indicators to Master before the Halving</h2> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{129}" paraid="873999985">Here are the basic tools and indicators that are essential for monitoring the crypto market. Achieving mastery of these tools will help you gain a basic understanding of how the market might move leading to and after the Bitcoing Halving event. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{145}" paraid="1227863675">With a ThinkTrader account, you get free access to TradingView’s powerful charting interface, equipped with advanced trading tools and features. <br /> </p> <ol role="list" start="1"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="1" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="1" role="listitem"> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{155}" paraid="370002707">Price and Volume Charts <br /> </p> </li> </ol> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{166}" paraid="548849887">Visualise past and present price movements so you can identify patterns and trends. <br /> </p> <ol role="list" start="2"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="2" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="1" role="listitem"> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{178}" paraid="707903167">Moving Averages (SMA and EMA) <br /> </p> </li> </ol> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{187}" paraid="816925228">Simple and Exponential Moving Averages can help smooth out price data over specific periods, i.e. before and after the halving, providing insights into the overall direction of the market. <br /> </p> <ol role="list" start="3"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="3" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="1" role="listitem"> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{219}" paraid="797675934">Relative Strength Index (RSI) <br /> </p> </li> </ol> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{226}" paraid="1284535900">This momentum indicator can help identify whether BTC and other altcoins are overbought or oversold, offering clues on whether there’s an imminent price surge or downturn. </p> <h2 paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{226}" paraid="1284535900">Risk Mitigation During the Bitcoin Halving Event </h2> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{246}" paraid="1294906623">The Halving event can lead to high volatility in the cryptocurrency market. If you’re planning to trade cryptocurrencies, make sure you apply these risk management strategies: <br /> </p> <ol role="list" start="1"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="1" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{19}" paraid="627052113">Set take profit and stop loss orders <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{26}" paraid="51518790">The crypto market moves fast. Setting take profit and stop loss orders will help you to secure profits and/or avoid bigger-than-expected losses. TP and SL orders help you exit positions at a predetermined price level without you constantly having to monitor the charts. <br /> </p> <ol role="list" start="2"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="2" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{38}" paraid="117793369">Diversify your portfolio <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{45}" paraid="326773893">While the main focus of the Halving is on Bitcoin, diversifying your portfolio is always ideal. Try to explore altcoins such as ETH, XRP, ADA, or BNB. You can read our guide on how the Bitcoin Halving event affects altcoins here. <br /> </p> <ol role="list" start="3"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="3" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{59}" paraid="665018224">Use leverage cautiously <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{66}" paraid="2133792347">ThinkMarkets offers crypto traders leverage as high as 50:1. This can amplify gains but also lead to larger losses. It’s recommended that you open smaller positions, especially in highly volatile markets. <br /> </p> <ol role="list" start="4"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="4" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{84}" paraid="1701944390">Stay up to date <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{91}" paraid="739956552">When trading cryptocurrencies, it’s crucial to keep yourself updated with market news and developments. This can help provide insights into potential price movements and allow you to adjust your strategy accordingly. For example, governments and financial institutions accepting crypto can increase its appeal, thus causing a price surge. On the other hand, stricter regulations or outright banning of cryptocurrencies can lead to downturns. </p> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{117}" paraid="1451762027"> </p> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{121}" paraid="662450524">Trade the Bitcoin Halving event with ThinkMarkets to gain access to advanced trading tools, automatic risk management features, and the latest market news. </p>