Technical analysis is a handy tool for traders, but the truth is that it’s not an exact science.

If it were, reading a book would make you a professional trader. Chart patterns may appear different to the eyes of each analyst based on their biases. The first step is to try setting aside as much as possible any belief you can have about where the price is heading next and focus as much as possible on objective elements. This is necessary to use Technical analysis appropriately,

Let’s try to apply this method to Bitcoin’s chart. As time passes, the chart seems to be more likely on the verge of another significant drop. Since June, the price has posted lower highs, while the horizontal support is holding. The question is, for how long? Some traders have raised the idea that Bitcoin is building a massive head-and-shoulders pattern.

For how bearishBitcoin may look like, the good news is that this is not an H&S formation. The “head” is atypical, but what is even less common is how the volume develops. To be a valid H&S , the volume should be higher on the left shoulder and decreasing after that. Conversely, Bitcoin’s volume has been higher on the right shoulder, indicating high interest both for buyers and sellers around those levels. Another good news is that Bitcoin broke up from a similar accumulation period at the beginning of the year.

The post Make No Mistake appeared first on Coinrule.

One thing about financial markets is that prices can experience significant swings. This year alone, there have been several fluctuations in the crypto market. 

Despite this, experienced traders translate volatility into opportunities thanks to these seven tips. This article will take a deep dive and provide a straightforward guide to trading crypto in the 2021 bull market. 

Bull and Bear market

In a bear market, prices trend down. This often happens because there is a negative market sentiment and traders feel less confident about the market. When this happens, more people are selling. This subsequently causes a decrease in prices, which leads to more pessimism and, therefore, more selling.

Conversely, a bull market is a condition in which market prices trend up. A bullish trend occurs when there is a significant, sustained increase in market prices across the board. However, it takes proper insight to predict an impending bull market. A bull market is marked by trader/investor confidence about the market – it describes a state of overall optimism about prices, leading to price rises and even more optimism.

Did you know? Both names are derived from the direction from which that animal attacks. The bull thrusts its horns upward, while the bear clamps down on its prey.

The 2021 crypto market is an excellent example of a bull market as there has been intense upward market activity. However, unlike traditional markets, the crypto space is influenced by several factors. Understanding these factors can help you become a better trader. 

This article will be going through 7 tips for trading in the 2021 bull market.   

1. Follow Trends, Not Pumps

Trading is not about getting rich quickly off the markets. Many people have learned this the hard way this year. However, you do not have to. Seasoned investors and the top 1% (those that have the highest stakes) are the ones who profit from others chasing pumps.

Also, bull markets are noisy because of the excitement, and you must sift through the daily noise. The market fluctuations this year have happened for several unpredictable reasons. Elon’s tweets, Binance’s FUD, and China’s ban had a major role in how the price moved over the recent months. There’s no need to feel bad about missing out on previous and even future rallies. Instead, please pay attention to the trends and play it smart. New opportunities come every day!

In bull markets, it is best to ride the trends. Automated strategies can help you keep tabs on the market and enter the right trades while limiting losses.

2. Don’t be Tempted to Margin Trade

Margin trading is a great way to multiply your position sizes by increasing your leverage. However, often the risks offset the benefits of margin trading. You can suddenly face huge losses when liquidation hits. A liquidation occurs when the exchange closes the position, leaving the trader with a loss that he won’t recover if the market rebounds back higher.

Many newbies make the mistake of over-leveraging their positions in margin trading. The fear of losing everything and seeing your portfolio go down to zero should be enough reason to avoid margin trading right now. 

For a rough example, with 10x leverage, a 10% move against you wipes you out, and with 100x leverage, a 1% move against you liquidates your entire capital. The actual numbers are even scarier once you factor in trading commissions and liquidation fees.

You can trade using leverage with Coinrule to increase your returns potentially, but never forget always to use a low degree of leverage.

3. Have a Trading Strategy

That may sound like something many give for granted but it’s likely the most important among these seven tips for trading.

Trading without a plan is planning to fail. Success in the crypto market is about understanding market patterns and then using them to make the right trades. Patterns help you predict moves, and you can only see these patterns when you have a defined trading strategy.

A strategy or plan helps you do your due diligence before entering into trades. It is also a great way to limit the number of losses, prevent catastrophic losses, and make outsized gains. 

One of the main advantages of using an automated trading system is that you can easily adhere to the initial plan without stress or emotions interfering with your trading decisions.

4. Do Your Own Research

There is a lot of noise about crypto these days on the internet and mainstream media. For most, it is not easy to shift between what’s valuable and what is not. This is why we suggest that you always do your own research before entering into any trades, especially for lower-priced cryptos with small market cap coins.

Beginners often look to others for crypto recommendations and end up losing money. When you do your own research, you understand each coin better and are more knowledgeable about entering and exit trades. 

Don’t confuse genuine advice with a shilling. Don’t forget that many are interested in adding hype to the coins they have large stakes in.

5. Watch for Reversals

The truth is that there are tons of available information, guides, and recommendations out there. However, to make sense of it all, you need to apply what you know correctly.

In a bull market, you need to be on the lookout for sharp reversals constantly. This helps you determine the best time to exit trades or take some profits off the table.

It is also crucial to have price targets and stop losses as part of your trading plan. Getting a good entry is only half the work. You also need to know when to exit the trade strategically, whether the trade goes for you or against you.

6. Don’t Trade based on Emotions

The markets are highly volatile and, when it comes to trading, it is best to deal with facts and data instead of feelings. Traders regularly have to deal with emotions like fear and greed. It is essential to be ready for any possible scenario. You cannot afford to trade based on your feelings. 

To make money in a bullish market like the one we currently have, you need discipline. That’s why you need to always stick to your trading plan. 

Bots have no feelings. They execute trades in cold blood based on the setup of your trading system. By setting clear, logical rules into algorithms, you can cut your losers and ride your winners much more effectively, efficiently, and emotionlessly.

7. Diversification is Crucial

Diversification is one of the best tips for any investor in today’s crypto market. You can reduce risk by allocating funds across different assets. This way, you don’t have to depend on the performance of a single asset.

Furthermore, for diversification to be more effective, you should try holding assets uncorrelated from each other. 

To take it one step further, Coinrule helps you diversify across strategies. The pros don’t tell you that they are never just buying or just selling – they are often doing both simultaneously to trim the risk at any time.

You can run multiple strategies at the same time with Coinrule. One may be buying dips on your favorite coin, another may scalp short-term trades, while another is rebalancing your portfolio. You have maximum flexibility to manage your wallet.

Rounding Up

Cryptocurrencies are reshaping the financial world, and every day, more people are looking to trade them. That is excellent news for the whole ecosystem because it means more market activity, liquidity, and efficiency. 

However, volatility is the primary concern with the crypto market, especially during unprecedented times like these. If you pay attention to these seven tips for trading, you ensure that you make the best of the market trends.   

At Coinrule, we help you make the best trades. We provide a holistic view of the markets and help you to trade better. 

DISCLAIMER

I am not an analyst or investment advisor. Everything that I provide here site is purely for guidance, informational and educational purposes. All information contained in my post should be independently verified and confirmed. I can’t be found accountable for any loss or damage whatsoever caused in reliance upon such information. Please be aware of the risks involved with trading cryptocurrencies.

The post Seven Tips For Trading In The 2021 Bull Market appeared first on Coinrule.

Everyone is trying to figure out what will be the peak of the current Bull Market. However, when investing, you need to be forward-looking and think ahead. While the price target for the current market cycle is still very uncertain, it may be easier to foresee what will be the price floor of the next bear market.

Looking at the previous cycles, in both cases, the parabolic uptrend had a brief re-accumulation phase at around half of the way. The price level at which that consolidation happens market years after the same level at which the Bear market followed found its final support.

What if the current sideways price action on Bitcoin anticipates a more significant price drop instead of a new leg up? That is possible, yet unlikely. Usually, parabolic uptrends end up in a much sharper way. On-chain data and the macro environment are still positive, and that could offer a supportive tailwind for months.

Why predicting the bottom of the next Bear market is important? Because knowing that you have the chance to buy below such levels adds significant upside to your investment and will protect your allocation in future drawdowns. Short-term volatility may push prices slightly lower, but dollar-cost averaging Bitcoin may be a very interesting long-term strategy.

The best time to accumulate Bitcoin was years ago. The second-best time may be now.

The post One Step Ahead – The bottom of the next Bear Market may be in appeared first on Coinrule.

What is the Index?

The Crypto Fear and Greed index is a metric that provides a proxy of the state of the Crypto market. By analyzing multiple elements and assigning to each of them a specific weight, the index can say if buying Bitcoin or other cryptocurrencies is currently a good idea or not. Alternative.me publishes the index daily and derives a single score representing all of those sources. 

The index has historically spotted with significant precision the best times when it is more profitable to buy Bitcoin or other Cryptocurrencies. Filtering out the daily “noise” of price ups and downs provides valuable guidance for traders and investors.

How is the Index calculated?

The index updates every day and uses multiple weighted indicators to determine a simple meter from 0 to 100. 

Currently, both technical and sentiment indicators blend into the Crypto Fear and Greed index.

• The volatility measures the magnitude of price swings in the last 30 and 90 days.
• The market momentum and volume capture how market participants are aggressively participating in the price moves.
•  The analysis of social media provides a snapshot of the current market sentiment.
• The Bitcoin Dominance measures the investors’ appetite for risk. Generally, the higher is the Bitcoin Dominance, and the more conservative the traders are, as they seek refuge in Bitcoin rather than other cryptocurrencies.
• The Trends tracks various Bitcoin-related search queries on Google.

Understanding the index

When the Crypto and Fear index is low, it means “Extreme Fear,” while when it prints higher values, it means “Extreme Greed.” 

As the main rule for every trader and investor is to Buy Low and Sell High, using the Crypto Fear and Greed index makes sense as it helps to spot the highs and lows of each market cycle. 

When the index signals intermediate values (between 50 to 70), the market may look uncertain or trading sideways. That is the perfect time for running specific strategies for these market conditions.

With Coinrule, you can catch the opportunity of selling into short-term price rallies to aim to buy back Bitcoin or other cryptocurrencies at lower prices. Thanks to a strategy like this, you can accumulate more of your favorite coin when the price moves with low volatility.

On the other hand, as soon as investors get more greedy (signaled by index values above 70), the market becomes very exuberant. So other trading strategies allow you to capture upside potentials for all the coins on the market. This is an example of rules which enable scalping short-term trades while keeping a flexible stop-loss to protect your positions.

What is the Crypto Fear and Greed Index showing now?

Currently, the fear and greed index sits at 52, recovering from an extreme drop on 26 of April that hit the level of 26, the lowest level that has been recorded since April, 28th 2020. Since this shows that the index has just increased from a period of extreme fear, this generally signals a good time to buy Bitcoin. 
Using the index as a strict buy indicator is not advised, however using it along side your usual trading tools, like technical indicators can be of further confirmation about an entry point.

The level of the index coupled with other indicators such as RSI can prove to be a great strategy. Just like the Crypto Fear and Greed Index, also the RSI usually spots great buy opportunities for Bitcoin.

Applying the Index to your strategy

The best way to optimize the return of your trading strategies is to set up the parameters according to market conditions.

For example, given that the Crypto Fear and Greed Index is signaling still uncertainty in the market, this could be an interesting opportunity to run a strategy to profit from sideways price swings like the following.

Should the value of the index increase above 70, that will be a positive signal of momentum. A strategy to buy short-term dips on Altcoins could provide positive returns.

Key takeaways

Overall the Fear & Greed Index can be a valuable tool to anticipate when to launch certain types of rules according to market conditions. Ultimately the profitability of rules is linked to the market conditions, insight into the sentiment of the market can be a valuable asset in positioning rules. 

• The Crypto Fear & Greed Index analyzes emotions and sentiments from different sources, then aggregates them into a single metric.
• Zero on the index means “Extreme Fear,” and 100 means “Extreme Greed.” The index gives a more real-time reading of the cryptocurrency market than price alone provides. 
• You can use the index to assess the current market conditions and launch your trading strategies accordingly.

Disclaimer

I am not an analyst or investment advisor. Everything that I provide here site is purely for guidance, informational and educational purposes. All information contained in my post should be independently verified and confirmed. I can’t be found accountable for any loss or damage whatsoever caused in reliance upon such information. Please be aware of the risks involved with trading cryptocurrencies.

The post What Is The Crypto Fear And Greed Index? It May Signal To Buy Bitcoin appeared first on Coinrule.

Those that joined the cryptocurrency space a few years ago may remember the first puzzle they faced.

Where should I buy cryptocurrencies? Hacks, scams, downtimes, and poor user experience were a real pain. Those that recently started their crypto-journey don’t have as much to worry about. Prominent players gained a solid reputation for offering safe and easy options.

Coinbase is undoubtedly one of them, and yesterday they offered cryptocurrencies a privileged spotlight when they got listed on the NASDAQ, a US stock exchange. Crypto officially meets Wallstreet.

In 2020, Institutional investors made news announcing their interest in cryptocurrencies, and now the traditional financial market values one of the main crypto-players at $100 billion. At such a high valuation, the total market capitalization of all cryptocurrencies ( Bitcoin included!) all of a sudden seems cheap.

Looking at the chart of the total crypto market, it’s clear how things are heating up. Prices have been rising steadily since March 2020 on growing volume . The smaller channel, starting from February, now looks like a consolidation after the sharp gains in January that led valuations to double.

A new breakout here would signal a new wave of likely stronger FOMO. But watch out to manage your risk and gradually take profit on the way up. The faster the growth, the more the downside risk will increase!

The post Crypto Goes Public appeared first on Coinrule.

If I told you that the real Altseason is not even started, the first thing that would cross your mind would definitely be, “that must be an April fool!”.

This idea is quite fascinating, as already many coins on the market trade at all-time high value during this Bull Market. It’s hard to imagine that most of the upside is still ahead of us. Yet, if the picture that this chart depicts unfold to be accurate, Altcoins could have a lot to run in the coming months.

According to Bitcoin’s dominance, the Altcoin market looks still undervalued compared to Bitcoin . Add now that April is historically a positive month for crypto to the equation, and the result may be explosive.

You can check out this article on the Big Shift.

There are at least two elements that could provide solid support to this thesis. Bitcoin rebounded strongly from the recent drops, and it’s now trading just below a key resistance that, if broken, would push it straight into new price discovery . On top of that, some large-cap coins still have plenty of room to catch up with Bitcoin . See Ethereum , Zcash, and Litecoin, among the most notable cases.

If you took some profits recently, that was a reasonable choice that led you to have the liquidity to accumulate those coins that didn’t pump yet. These coins will likely outperform Bitcoin in the short term, allowing you to compound more Bitcoin in the future. As long as Bitcoin’s dominance remains below 60, buying the dip strategies offers the best risk-reward profile. But never forget to manage your risk.

It’s April’s fool week, after all!

The post 🚀Is this April Fools’ Day? appeared first on Coinrule.

When investing in cryptocurrencies, you should be well aware of the difference between a coin’s price and its market cap. The strongest of Bitcoin’s selling points is that there will only ever exist 21 million coins. Investors can relatively easily assess Bitcoin’s Blockchain’s aggregate value multiplying the price of a coin by the total future supply. That’s why Bitcoin is the most expensive and valuable cryptocurrency on the market.

What is the market cap?

Market capitalization is an indicator that measures and keeps track of the market value of a cryptocurrency. The market cap is an indicator of the dominance and popularity of cryptocurrencies. In January 2021, the Bitcoin market cap reached an all-time high and had grown by over $400 billion compared to the summer months. The Crypto market cap currently sits at more than 1 trillion U.S. dollars. Market capitalization is calculated by multiplying the total number of Bitcoins in circulation by the Bitcoin price. The Bitcoin market capitalization increased from approximately one billion U.S. dollars in 2013 to several times this amount since its surge in popularity in 2017.

How total crypto market cap evolved

It is important to note how the total Crypto market cap has evolved over the years. As cryptocurrencies gain popularity, we can see exponential growth in the crypto market cap of all cryptocurrencies as a whole. Bitcoin is not the only coin in the spotlight, the asset class as a whole has been gaining popularity with both retail and institutional investors, aiming to take part in the next generation of technology.

Price misconceptions looking at only price

Looking at the price of Crypto does not tell you the whole story.

Many novice investors enter the space and see coins that have a price below 1$ as an opportunity, hoping that one day it will reach the price of $10,000, making them rich. However, this is not the case; looking at the price only gives half the story. If there may be 1 Billion of those coins available, this means that for it to reach 100 dollars, it would have a market cap of $1 trillion, comparable to the current Bitcoin’s market cap. The question would be, is such valuation justified? Is it reasonable that this coin is valued as much as Bitcoin?

For many crypto projects, achieving a 1 trillion U.S Dollar market cap in the short term is close to impossible.

Is Ripple under-priced?

A typical example of this is Ripple. Previously, when Ripple held the 3rd place spot according to market cap, many new entrants to the market would see it as a great deal, compared to the hefty price of Bitcoin and Ethereum. However, if you take a deeper look into Ripple’s token economics, you would realize that with a total supply of 100 Billion, Ripple would need to achieve a market cap of 1 trillion to have a price of 10$. 

Looking at the price as an indicator of value is misleading. Comparing the price of Uniswap against the price of Cardano, you would believe that Uniswap is more valuable. Upon closer inspection, you would realize that this is not the case, since Cardano network is valued at double Uniswap despite only having a price of $1.4 compared to the 30$ of Uniswap.

Dogecoin on the way to $1

Another similar fallacy would be Dogecoin. In recent months, DogeCoin has gained popularity with Gen Z on social media, stating that Dogecoin can reach 1$. However, when looking at the circulating supply, you would quickly realize that for DogeCoin to get to $1 it would need a market cap of $129 Billion. Meaning it would have a market cap equivalent to Cardano, BNB, Polakadot and XRP combined.

Quite a valuation for a meme-coin…

Where can the Crypto market cap go from here?

Comparing Bitcoin with the most prominent store of value, Gold. Bitcoin is slowly making its way up to the top of the leaderboard. Already surpassing the biggest banks in the world and some of the world’s most prominent companies. Going forward, as the popularity of Bitcoin grows, and the shift between the analog generation to the technologically versatile generation “Gen Z”. We will see the Bitcoin market cap growing closer and closer to that of Gold, with hopes of surpassing it one day in the distant future.

Looking at some of the world’s largest companies compared to the market cap of BTC, we see that Bitcoin has already surpassed many prominent institutions such as Berkshire Hathaway and Facebook. This does not come as a surprise with the ever so growing popularity of Bitcoin. While the most valuable companies in the world run their business in a relatively stable economic environment, Bitcoin represents a whole new asset class with more potentials that still need to be discovered.

It’s worth noticing that you need new methodologies to value cryptocurrencies, as the traditional frameworks don’t apply anymore. You can read more about how to value a coin.

On-chain data shows that the number of participants in the Bitcoin network is unprecedented, exemplifying the mainstream adoption is coming.

Using Market Cap with Coinrule

To capture profits and optimize your trading strategy, you can use the market cap to filter out coins you want to trade on Coinrule. Market behaviour has shown that Medium cap cryptocurrencies tend to ride the trend later than large-cap Crypto’s. Creating a trading strategy to uniquely capture these opportunities can be done using the market cap filter on Coinrule, and an example can be seen below.

The rule above is structured to ride the uptrend on Mid-cap coins, to capture some of the growth that trickles down when Bitcoin increases in value. This setup can be adjusted to work with any indicator such as moving averages or price.

Create your rule now!

Final Remarks

• Market capitalization is an indicator that measures and keeps track of the market value of a cryptocurrency. Market cap is used as an indicator of the dominance and popularity of cryptocurrencies.
• In recent years, the crypto market cap has evolved drastically in both size and distribution. The market size has more than doubled, while the distribution between Bitcoin and altcoins continues to grow. 
• Price Misconception is common, price standalone does not give adequate information regarding the company’s value. One may look at market capitalization to get a clear picture of how the market values the project. 
• A prominent example of a company with a low price but a large market cap would be XRP. Despite having a low price of $0.45, XRP has a large market cap of roughly 20 Billion USD. Meaning that while people consider it to be cheap or a small project, it is in fact, a developed and prominent project. 
• The market cap of Bitcoin continues to grow, coming closer to that of Gold, surpassing many major commodities and 400 Billion away from the market cap of Silver.

The post Crypto Market Cap – Why Does It Matter? appeared first on Coinrule.