Top 5 Cryptocurrency Trading Strategies for Bitcoin and Altcoins – 2024 Guide

With so many cryptocurrencies being touted as the next big investment from Apple or Amazon stocks, Bitcoin definitely continues to stand out as the most important, the one leading this nascent market. There are currently more than 1,200 cryptocurrencies. The options are overwhelming, making it much more difficult for investors to figure out which of these digital assets will allow them to make big profits.

Two of the most popular questions on the Internet regarding cryptocurrencies are “What is the best cryptocurrency to invest in?” And “What are the best trading strategies for investing with digital currencies?”

Therefore, in this article, we will explain the best trading and investment strategies that we can use to increase our cryptocurrency accounts effectively. Before that, you should also utilize various trading tools that will grant you smooth trade. If you want to convert Satoshi to Bitcoin, USD, and other currencies  click here to use this tool and understand the exchange rates for your trade. Here are the top cryptocurrency trading strategies for Bitcoin and Altcoins.

1. “Buy and Hold” Strategy – Accumulation of Cryptocurrencies at the Lowest Price

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When finding a good project to invest in, it is good for the investor to buy a cryptocurrency with good fundamentals and accumulate it at its lowest price as its value decreases. It is common practice for traders and investors to withdraw part, if not all, of their investment, which essentially drives the price down.

If this is a project you believe in, stick with it and keep your investment through bad times while waiting for things to get better. A smart tip is to buy a coin that has already experienced its first drop, as this will sometimes cause the price to drop to an even lower level than the initial ICO price.

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Common reasons for a cryptocurrency crash, once the coin hits exchanges, can usually be linked back to investors in the presale, along with the initial team and developers, who typically receive the cryptocurrencies for free. Be careful and wary of coins that show an exaggerated sale, as if they are being thrown away.

However, investing in the right cryptocurrency can be very profitable. For example, we have Binance Coin (BNB), the cryptocurrency developed by the Binance exchange. During its ICO, the value of BNB was around $ 0.11, while today (September 2024), its value has exceeded $496.50. Clearly, the initial BNB investors have had an exceptional return on investment.

Of course, not all cryptocurrencies offer such a high return. Many are not worth much and are just a quick cash scheme. Therefore, the investor must carefully investigate which projects are worthwhile and can be profitable.

2. Breakout Strategies for Trading Cryptocurrencies

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This type of strategy can limit the risk of the trader and provide high returns if applied correctly. It is widely used by traders in multiple markets and cryptocurrencies, who are actively trading and looking to enter the market in the early stages of a trend. Breakout strategies are pretty simple in concept and can be used by both novice and experienced traders.

When trading with these methodologies, the trader looks for precise entry points where the price is about to make strong breakout movements, such as support and resistance zones or trend lines that are about to be traversed in a new direction. In the case of cryptocurrencies, the price of the digital currency is expected to break up a vital resistance (ceiling) to open a buy position or to break down important support (base) to open a sell position.

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3. Trend Following Strategies for Cryptocurrencies

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All markets move in bullish and bearish trends at least 30% of the time, and cryptocurrencies are no exception. That is why trend-following strategies have proven their effectiveness over time. They can be highly profitable, especially when the trader manages to enter an excellent long-term trend. Market trends can last for days, weeks, months, and even years. Hence trend-following trades can be the most profitable.

In this type of strategy, the operator usually tries to enter well-defined and identified trends, usually when the price makes setbacks that offer the possibility of entering the best buy or sell prices, instead of entering near the maximums or minimums of the market, dangerous levels since the price can suffer strong setbacks in these. This simple practice can significantly increase the profitability of these strategies.

4. The Balanced Portfolio Strategy

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This is the ideal type of investment strategy for investors who want balance in their portfolios. A balanced portfolio strategy includes buying multiple cryptocurrencies on the cryptocurrency markets to have a balanced portfolio.

This is an excellent way to test different cryptocurrencies, especially when the investor is unsure which ones will be profitable and which ones will not. In this way, you will quickly find out which coins have the best chance of success. From there, you may want to invest only in one or two cryptocurrencies that have given you the most of the earnings.

5. Invest the Profits in Other Cryptocurrencies

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So you have made a steady profit from the strategies mentioned above and have succeeded in building a cryptocurrency portfolio full of profits produced in this market. Now is the time to select other potential coins that show enormous potential.

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For this, it is recommended to take half of the profits you have obtained with each currency in which you have invested and start investing these benefits in other currencies that present high-profit potential. This will allow you to leverage your cryptocurrency investment to produce more returns on your return and create a well-diversified portfolio. For this, you can look for the periods when your earnings are parabolic (due to sharp spikes in price). This generally implies the unsustainability of the price. It is the perfect moment to withdraw money and invest in another virtual currency before another drop in price.

Remember, when you first start, it is a good idea not to invest in too many cryptocurrencies at the same time. You must be able to keep a steady hand on the pulse of your coins to get the best growth potential.

With all the strategies covered above, the trader needs to pick one and stick with it. Later, you can try other methods later once you have a little more experience. Your entire strategy must change and grow over time.