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.

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.

The initial recovery started in April 2019, but it took over six months for investors and traders to regain the confidence lost during the previous two years of Bear Market. Many Crypto are now starting to look very promising. But which are the most promising crypto in the next bull run?

Bitcoin Dominance Flashes Recovery Signs

The chart that synthesises best the current state of the Crypto Market is the one that shows Bitcoin Dominance over the last two years. 

In January, after a long period of depression, the broad Altcoin Market started overperforming Bitcoin, and this pushed Bitcoin Dominance below a key trendline. The trendline began precisely from the top of the Crypto bubble when the Altcoin buying-hysteria was at its apex. 

This is a clear sign of long-term reversal. It’s quite difficult to estimate the magnitude of the next price move. While it’s challenging to say what to expect from the Crypto Market in the coming months, it’s safe to assume that buying Altcoins in a diversified portfolio could be an attractive option compared to just holding Bitcoin. 

Many Altcoins already doubled in price in the past month, but some are lagging, and it could still be a good time for buying. Here are the most promising crypto in the next bull run.

Monero (XMR)

The chart seems to provide evidence for a reversal. The price marked a neat double-bottom, and from there it’s now up around 35%. 0.0077 BTC was a clear resistance, and Monero managed to trade above it for a couple of weeks now. We could see a retest that would provide even better entry prices, but the risk/reward is very appealing. 

Strong supports now provide a low downside risk, and the first target is now around an area of 0.012 BTC, which represents a potential upside of over 40% from current prices.

Ravencoin (RVN)

Ravencoin could be one of the most promising Cryptos for the next bull run. The coin is down 80% from the high in March 2019, and that represents a massive upside. Considering that the coin is up only 25% from its low versus Bitcoin, the risk/reward of buying around these levels is very favorable.

The price has been stuck in an accumulating zone since July 2019, so it’s obviously tough to predict when it will move higher. On the other hand, looking at the series of lower highs and at the price compression going on, we can expect some volatility when the verge of the triangle will approach in around one month.

The first significant support area is at 330 satoshis, and the volume increase is a sign of growing interest. Speaking of the volume, the fact that it keeps increasing on up moves and decreasing when the price retraces is a further positive sign to keep an eye on.

Basic Attention Token (BAT)

The token is up roughly 70% from the lows in September 2019, but the price range between 2.2K and 3K satoshis has historically offered a significant upside of around 90%, making of it clearly one of the promising crypto in the next bull run.

Last week the volume printed the second-highest figure since April 2019, when the price topped at its all-time high. The price is now attempting a new breakout. It will be worth keeping an eye on the next weekly close. If no significant retrenchment occurs in the short-term, that will be the sign that the accumulation phase is over.

Solid fundamentals also back basic Attention Token, and it was included in our watchlist of the coins with the highest long-term potentials.

NEO

The so-called Chinese Ethereum has been heavily hammered hard during the Bear Market and the price traded for long in a steep downtrend. The coin is currently up 60% from the bottom but still has an upside of about 800% to reach the top again.

At the end of October, the price broke above a major trendline with a remarkable volume, and since then ranged between 0.00144 and 0.1160 BTC. The volume decreased on the pullback and started to pick up again when the price approached the upper bound of the range. That’s a very positive sign.

It’s also interesting to notice that the price is forming a cup-and-handle pattern around the bottom. That is a generally bullish structure that could provide further evidence of a reversal.

0x (ZRX)

The token has a structure that resembles NEO closely. The price currently doubled since the lows but has an upside potential of about 700% to the all-time highs reached in May 2018. It’s worth noticing that the price topped while the market was struggling with a severe Bear Market. Traders should take this into account as that is an index of potential decorrelation with Bitcoin and the rest of the market.

The price double-bottomed at 1400 satoshis and the rebound lead to a breakout from the long-term downtrend. Also in this case, the move was coupled with a significant volume increase that validates its importance.

From the fundamental point of view, the token trades on all major exchanges and the team has a solid connection into the Crypto community. On top of that, 2019 saw a parabolic growth of the DeFi environment and the token could play a prominent role among the most promising cryptos in the next bull run.

How To Take Advantage Of These Setups?

Depending on the strategy that you prefer to pursue, different approaches could prove profitable in the current market conditions.

• Buy The Dip: Catch every price drop to buy at better prices. When the market is broadly trending higher, the risk/reward of buying is always more profitable, and buying in times of downturn amplifies the potential gains. This strategy involves attention and a prompt reaction to eventual price reversals. 
• Buy The Breakout: When the market volatility decreases, and it becomes uncertain what will be the direction of the next price move, it is safe to wait for the breakout of key levels and then buy the coin.
• Accumulate: This strategy consists of buying periodically one or more specific coins. Splitting the opening of your position across multiple orders gives you the possibility of buying also at a lower price, lowering your average cost of purchase and increasing the profit when the price moves higher.

Choose the strategy that fits your need and expectations of the market best and never forget to apply the basic rules of Risk Management.

Trade safe!

DISCLAIMER

I am not an analyst or investment advisor. Everything that I provide here site is purely for guidance, informational and educational purposes. You should independently verify all information in my post. I can’t be found accountable for any loss or damage whatsoever caused in reliance upon such information. Please be aware that trading cryptocurrencies involve a significant degree of risk.

The post The Most Promising Cryptos To Buy In The Next Bull Run appeared first on Coinrule.

2018 and 2019 have been very tough years for traders. Across this time, only during three months, the crypto market has traded in a clear uptrend, between April and June 2019. Traders and investors have been depressed for so long that many threw in the towel, giving up. You need solid management of the risks involved and of your emotions to survive such difficult conditions.

Are you still here? Do you still trade Crypto? Do you still think that Bitcoin is here to stay?

Well, kudos to you! You survived the longest crypto bear market so far, so you well deserve the best from the coming Bull market.

They say that what doesn’t kill you makes you stronger. That applies to Biology, Business, Financial Markets and for sure also Crypto.

2017 attracted traders whose only goal was to get rich quickly. They became greedy and got trapped buying the top, instead. But their biggest fault was not to have experienced the previous bear markets. More experienced traders knew that it takes years to reach the top, and it could all burst in a matter of days.

Treasure your experience because this will represent a valuable edge you will have on those that will approach trading crypto for the first time in the coming months.

On the other hand, if you are one of those making the first steps into Crypto, here are some advises and trading tips you will find useful.

Are we already in a Crypto Bull market?

There are many technical signs pointing at Looking at the Bitcoin chart from the lows in December 2018, we can clearly recognise an initial phase of accumulation, a sustained and rampant uptrend ignited from the breakout of the critical resistances at 4000 and 6100 USD, and a prolonged downtrend from the local top at 14000 USD.

The price retracement started in July 2019 is a shakeout for all those that FOMOed the first breakout in April. Nevertheless, the price didn’t even come close to where the price was in March, and barely reached the previous resistance at 6100 USD. This is significant proof that we can still safely assume that a new crypto bull market started in April and that this cycle is still going on on the right path.

Is this an Alt-Spring?

When it comes to the broad Altcoin market, it feels like it is still at an earlier stage of the cycle than Bitcoin. On average, the price of most of the Altcoins lagged significantly, especially during the second half of 2019, but that also means that the margin for potential price growth is larger. In particular, some coins looks solid both from a price and fundamental perspective.

Here you can read more about our favorite coins in 2020.

The Bitcoin dominance broke below the trend line that starts back from the top of the previous bull market in January 2018. This signal represents a fascinating clue of what will likely come next. As soon as the price momentum for Altcoins consolidates, and traders and investors gain confidence in the trend, that will ignite a heavy buying pressure. This fear-of-missing-out will be fuelled by three main elements.

• all those that sold suffering significant losses now will try to avoid buying back at higher prices. As the price will move up increasingly faster, unfortunately, many will be forced to buy back at sub-optimal prices.
  
  
• new-comers will be tempted by the great potential for price growth and quick gains. This high confidence in a sustainable uptrend will make them less price-sensitive and therefore willing to pay higher prices.
  
  
• Fewer sellers will be available on the market. Price resistance will be weaker as no many sellers will be willing to trade. As the price moves sharply higher, there will be more incentive in buying than in selling. Less offer of coins and stronger demand are the perfect ingredients for a crypto bull market.
  

When MOON?

All that said, making profits in a crypto Bull market is probably easier than during a bear market, but that doesn’t mean that everything will be smooth and chill.

The idea that Cryptocurrencies will reach the moon finally, using more appropriate trading jargon, means that the price will reach the target of this market cycle. That will allow traders to cash out their profit, quitting their job and retiring on tropical beaches sipping margaritas. Unfortunately, that is pure utopia!

Even during the most optimistic phase of a crypto bull market, the temptation of selling to secure the profit will be strong. Price shakeout and sudden dropdowns will be scary, and that temptation will push you to sell. It’s always worth noticing that during 2015 and 2017 the price of Bitcoin dipped over 30% 6 times between 2015 and 2017 while surging around 900% over the same period.

Selling is a savvy approach, also during a strong uptrend. All you need to do is to plan when to do it in advance, so you don’t need to rush into fire-selling when conditions are not optimal. Building an automated trading plan can help you with that.

Excluding the emotional elements from your trading plan can only improve your results.

Enjoy the ride!

Also, take profit periodically on your gains. It’s the right way to manage the risk of your portfolio during a crypto bull market. You can reinvest later in times of price drop or simply cash out to repay some debt or invest in other assets.

The most important thing to keep in mind is the amount of your investment you are going to sell. Based on your risk-aversion and needs, schedule in advance the amount of the capital exposure you want to keep investing in Crypto and how much, instead, periodically you want to sell when specific price targets are reached.

Never forget that the more you stay invested in Crypto without selling, the more the amount of overall gain will grow thanks to the compound effect. At the same time, there is more risk of remaining stuck with a relatively large bag of coins whose price dropped too quickly to allow you to realise some profit on your position.

Quite interesting time await Crypto traders in the coming months. The market will provide great opportunities to those that will be ready to catch them. Read here about five more trading tips about how to get the best of a Crypto bull market.

You can put in practice these trading tips building an automated trading strategy with Coinrule. Create your rule now!

Trade safe!

The post The Crypto Bull Market is Here – Trading Tips For A 2020 Run appeared first on Coinrule.