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Bitcoin Trading Guide- Important Steps for Beginners

Bitcoin adoption and popularity are growing by the day. And as the price of Bitcoin continues to make significant moves, traders can make more profits and faster. Bitcoin trading mechanics are straightforward. You can trade Bitcoin the way you can do fiat currency. The only difference is that a central authority does not control the crypto market. Also, most factors that affect the price of traditional currency do not apply to digital currency.

You’ve heard that people are using Bitcoin software like bitcoincode to optimize and streamline their investments. Well, that’s true. Crypto trading software works by setting trading parameters and then looking for the most profitable trades based on those settings. And this automates the trading process, thereby saving you money and reducing the risk factors.

But, even when you use a crypto trading app, it would help if you were systematic. This article highlights the essential steps for crypto trading beginners.

1. Research

Start by researching about Bitcoin. Find out everything you can about this cryptocurrency. Also, find out about different Bitcoin trading strategies. Some of the most common Bitcoin trading strategies are:

HODling
Trend trading
Day trading
Breakout trading
Hedging

Take your time to learn about each of these strategies to decide what works best for you. Use different online resources, including e-courses, videos, and e-books, to learn about Bitcoin trading. But don’t forget that no strategy is risk-free, no matter how popular it is.

2. Come Up with a Trading plan

After studying different Bitcoin trading strategies, come up with a plan. Trading Bitcoin is the same as any other venture. Therefore, come up with criteria that will lead to your success. Decide how you will implement your chosen Bitcoin trading strategy.

If you don’t plan, you will quickly become a victim of the fear of losing or insatiable greed. Therefore, come up with a plan that includes precise, realistic goals. Decide your risk profile and a target profit. Determine the amount you can invest, knowing you can lose all of it.

3. Mitigate Trading Risks

No investment doesn’t have some risks. Whether you are trading Bitcoin or stock, you have to deal with some risks. The volatility of crypto prices is the leading risk factor to consider when trading Bitcoin.

However, you can mitigate this risk by setting stop-loss and limit-close orders. And this will help you limit losses or secure profits before the crypto market gets out of control.

4. Find a Reliable, Safe Bitcoin Exchange

A Bitcoin exchange is the place where you buy and sell this cryptocurrency. And, there are many platforms where you can purchase or sell Bitcoin. However, take your time to research the available crypto exchanges. Not every Bitcoin exchange you come across is safe and fast. What’s more, different platforms have varying rules for cashing out Bitcoin into fiat money.

Ideally, you should research the market to find a secure and convenient crypto exchange. An ideal platform should enable you to purchase and sell Bitcoin faster. That way, you avoid losing on a good trading opportunity.

5. Find a Secure Digital Wallet

Just like a crypto exchange, choose a secure and reliable digital wallet. A wallet is storage for Bitcoin. When you store your Bitcoins in a digital wallet, you can move them to and from an exchange. You can also send your Bitcoins to another person with a digital wallet.

The Bottom Line

Bitcoin trading can be a profitable venture if done correctly. Just like any other investment, you should venture into Bitcoin trading systematically. Follow these steps to start trading Bitcoin for profit.

Ethereum’s Top 10 Whale Addresses are Holding a Total of 16.86 Million ETH as Sentiment for Ether Remains Bullish

Ever since Ethereum (ETH) achieved a new milestone of over $2,000 on Feb 20, the second-largest cryptocurrency by market capitalization has been experiencing a price correction.

It is trading at $1,546 at the time of writing, according to CoinMarketCap.

New data by Santiment reveals that crypto whales see this trend as the perfect storm needed to accumulate more ETH tokens. The on-chain metrics provider explained:

“Ethereum’s top 10 non-exchange whale addresses are now holding the most combined supply of ETH tokens (16.86M) since July 2016. On March 1, a single-day addition of 1.03M tokens was added among these addresses, the highest one-day jump in 6 weeks!”

Santiment noted that these Ethereum whale addresses added 1.03 ETH two days ago, showing their confidence in this cryptocurrency even if a pullback has been experienced since it hit an all-time high of $2,000. Based on the current price of $1,546, these addresses holding Ethereum are worth approximately $26 billion.

Ethereum’s notable growth

Amazon Web Services (AWS), a cloud computing platform subsidiary of Amazon multinational technology firm, has announced that Ethereum is now available on its Amazon-managed blockchain service.

This approach will offer AWS customers secure encryption, networking, and access to the network through standard open-source Ethereum APIs.

The Ethereum network has emerged to be one of the most sought-after in the decentralized finance (DeFi) sector based on some of the products it offers, like smart contracts. For instance, DeFi’s total revenue hit $800 million in February.

The launch of ETH 2.0 in December last year has been the icing on the cake for Ethereum. The blockchain network intends to transit from the current proof-of-work consensus mechanism to a proof-of-stake one, which is deemed more environmentally friendly.

Ethereum is emerging to be a force to be reckoned with in the crypto space because its daily transfers increased from $373 million to over $9 billion in just a year.

Ethereum Gas Fees Hit a Monthly Low – Could this Trigger an ETH Uptrend?

After surging past the psychological level of $2,000 on Feb. 20, Ethereum (ETH) has been experiencing a pullback as intense selling pressure has been pushing the price down. ETH is hovering around $1,470 and is down by nearly 8% in the past 24 hours.

Ethereum has been experiencing a price plunge because of high gas fees as they recently hit an all-time high – with an average transaction fee of over $30. This proved detrimental because it made the decentralized finance (DeFi) sector almost entirely impractical to use for the majority of retail traders.

Nevertheless, new data by Glassnode notes that the total gas fees paid have hit a monthly low. The on-chain data provider disclosed:

“Total Ethereum fees paid (7d MA) just reached a 1-month low of $666,735.56.”

Ethereum might be back on its feet thanks to this revelation because its network is one of the most sought-after in the DeFi sector. The high gas fees were making it unattractive because users had started seeking cheaper alternatives.

DeFi has been one of the engines behind ETH’s recent bull run based on the soaring demand for some of its products, like smart contracts. For instance, DeFi’s total revenue hit $800 million in February.

20% of Ethereum supply hasn’t moved for more than 3 years

According to EthHub co-founder, Antony Sassano, 20% of the total Ethereum supply has stagnated on-chain for more than 3 years.

Source: Glassnode

This notable holding culture by some investors shows their growing confidence in the second-largest cryptocurrency based on market capitalization.

Crypto data provider Santiment recently stated that Ethereum’s top 10 whale addresses were holding a total of 16.86 million ETH as sentiment for Ether remained bullish.

Time will tell what Ethereum has in store because within the month of January alone, Grayscale Asset Management purchased an additional 243,302 Ether, which was valued at more than $380 million. The digital asset manager currently manages a total of 3.17 million ETH.

Short-Term Bitcoin Holders Have Been Selling at a Net Loss Since May 13

Ever since Bitcoin (BTC) dropped from the record-high price of $64,800 set in mid-April, short-term holders have found themselves at the receiving end after a sharp correction, as revealed by Dilution-proof.

The crypto data provider explained:

“On average, short-term Bitcoin holders have been selling at a net loss (SOPR <1) since May 13th. The short-to-mid-term market sentiment has to flip to bullish again for short-term holders to gain the confidence to actually hold onto their Bitcoin and not to accept losses so easily.”

Bitcoin investors once enjoyed a remarkable bull run since the top cryptocurrency broke the previous record of $20,000 in December 2020. This price had become the psychological level, which BTC had tried to break over the last three years.

Nevertheless, Bitcoin’s upward momentum came to a grinding halt as a sharp correction dragging the price to lows of $30,000 on May 19.

The top cryptocurrency was hovering around the $36.6k price during the intraday, according to CoinMarketCap. Therefore, this price action in the Bitcoin market has caused short-term holders to record losses.

Bitcoin supply last active more than two years ago hit a monthly-high

According to on-chain metrics provider Glassnode:

“Bitcoin supply last active 2+ years just reached a 1-month high of 44.699%.”

These statistics show that BTC stored in cold storage for long-term purposes was being traded.

Market analyst William Clemente III recently revealed that 76.7% of BTC was illiquid or in strong hands, referring to investors who bought Bitcoin for holding purposes rather than speculation.

The on-chain analyst had previously disclosed that Bitcoin supply was getting back to long-term holders. Furthermore, Bitcoin mining was shifting from China to the United States.

Galaxy Digital CEO Mike Novogratz noted that Bitcoin would not be used as a payment system, but investors would buy it to shield against ‘insane’ global deficits.

Long-Term Bitcoin Holders Keep Stacking While Short-Term Holders Keep Selling

Bitcoin (BTC) has spent the last two months ranging between $30,000 and $40,000.

It, therefore, shows that bulls and bears have been embroidered in a tussle, and William Clemente III acknowledged this fact. The on-chain analyst explained:

“Long Term Holders keep stacking: +20,969 BTC to their holdings today, +145,021 BTC to their holdings in the last week, and +397,487 BTC to their holdings in the last month.”

He added:

“Short Term Holders keep selling: -15,085 BTC from their holdings today, -112,950 BTC from their holdings in the last week, and -428,749 BTC from their holdings in the last month.”

These statistics show that as long-term holders continue buying more Bitcoin, their short-term counterparts are offloading their holdings.

Crypto data provider Dilution-proof recently disclosed that short-term holders were selling at a net loss since May 13.

Total fees paid on the Bitcoin network hit an 11-month low

According to on-chain metrics provider Glassnode, the BTC total fees reached an 11-month low of 1.488 BTC.

This is related to recent the market crash, which drove Bitcoin price from an all-time high (ATH) of $64.8k to lows of $30k on May 19.

Google searches for legal tender reached an ATH. Lucas Outumuro, a senior analyst at IntoTheBlock, acknowledged that google searches for “legal tender” had gone through the roof. He stated:

“The World is paying attention. Google searches for “legal tender” hit a new high following El Salvador’s Bitcoin Law.”

El Salvador recently became the first country to adopt Bitcoin as legal tender. This move is expected to generate jobs in a nation where 70% of the population works in the informal economy and does not hold a bank account.

Furthermore, it is anticipated to be a way that offers access to investment, savings, credit, and secure transactions.

Bitcoin Addresses Holding Between 100 and 10,000 BTC Hit a 7-Week High

Bitcoin (BTC) was still standing at the $40k psychological level to trade at $40,046 during intraday trading, according to CoinMarketCap.

BTC addresses holding between 100 and 10,000 BTC have been on a spending spree, given that they have added 90,000 BTC to their portfolio, as acknowledged by Santiment. The on-chain metrics provider explained:

“Bitcoin addresses holding between 100 to 10,000 BTC have accumulated 90,000 more BTC in the last 25 days. They now hold a 7-week high of 9.11m BTC, currently worth a total of $366.89Billion at this time, and 48.7% of the total Bitcoin supply.”

Therefore, Bitcoin whale addresses hit a 7-week high as they continue accumulating more coins.

Bitcoin long-term holders are the true “diamond hands”

BTC long-term holders have shown their firm stand of keeping their coins regardless of market turbulence, as alluded to by IntoTheBlock. The crypto data provider noted:

“Bitcoin long-term holders are the true “diamond hands”. YTD, the number of addresses holding BTC for more than one year has increased by 3.9%. 22.16 million addresses or roughly 58.52% of the total Bitcoin Holders are holding 9.85m BTC for more than 1 year.”

These sentiments were affirmed by on-chain analyst William Clemente III who stated that holder net position change flipped green for the first time since October 2020.

He had previously acknowledged that long-term BTC holders were stacking while short-term ones were selling.

Bulls are still not in charge

Market analyst Lark Davis believes that Bitcoin bulls are not yet dominated the market because the top cryptocurrency failed to close above the 200-day moving average (MA) despite being a stone’s throw away.

Davis recently stated that Bitcoin needed momentum to hit $43,000 for it to retake the 200-day MA.

The 200-day MA is a key technical indicator used to determine the general market trend. It is a line that shows the average closing price for the last 200 days or roughly 40 weeks of trading. Therefore, a surge above it represents the start of an uptrend.

The Top 10 Ethereum Non-Exchange Whale Wallets Hold 19.67 Million ETH

Ethereum (ETH) was down by 2.96% in the last 24 hours at $2,440 during intraday trading, according to CoinMarketCap. The second-largest cryptocurrency by market capitalisation shed off a considerable amount of value after plummeting to lows of $2,000 from an all-time high (ATH) of $4,350.

Nevertheless, Ethereum whales are taking advantage of this situation to accumulate more coins, as acknowledged by Santiment. The on-chain metrics provider explained:

“The top 10 Ethereum non-exchange whale wallets are continuing to climb in terms of ETH held. Combined, the 19.67m coins held by these addresses are the most combined ETH owned by the top 10 non-exchange addresses since July, 2016.”

Therefore, ETH non-exchange whales have been on a record-breaking mission as the amount of Ethereum held is at an ATH.

These sentiments were recently echoed by Documenting Ethereum. The crypto data provider noted that ETH whale addresses were still hovering around an all-time high despite the drop-off witnessed in May.

Total value locked in ETH 2.0 hit a 7-month low

According to crypto analytic firm Glassnode:

“Total value in the ETH 2.0 deposit contract just reached a 7-month low of 224 ETH.”

It, therefore, shows investments in Ethereum 2.0, which was launched in December 2020, have dried up.

ETH 2.0 seeks to transit the present proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) platform. POS is seen as a game-changer because it is environmentally friendly and can tackle the high gas fees challenges.

Meanwhile, the number of Ethereum deposits on crypto exchanges recently hit a 5-month low of 548.940.

It could, therefore, suggest that Ethereum stored in cold storage or wallets is not being moved for holding purposes, which is a bullish signal.

On the other hand, 23% of the ETH supply is locked in smart contracts. Some features on the Ethereum network, like smart contracts, are widely used in the decentralised finance (DeFi) and non-fungible token (NFT) sectors.

Active Bitcoin Addresses Hit a 14-Month Low as Long-Term BTC Holders Continue Accumulating

Bitcoin dropped below the psychological mark of $30K for the first time since January to hit lows of $28K in the last 24 hours. Nevertheless, the leading cryptocurrency has gained momentum. The latest price was up by 7.47% at $34,013 during intraday trading, according to CoinMarketCap.

Despite this surge, the number of active BTC addresses reached a 14-month low of 43,639.482, as revealed by on-chain metrics provider Glassnode.

Bitcoin’s recent renewed effort to breach the $40,000 level was dented by China’s strengthened crackdown of crypto mining and related trading, triggering FUD (fear, uncertainty, and doubt) among investors.

As a result, on-chain transactions nosedived to a two year low of 8,843.054, whereas BTC price has been down by 15.52% in the last 7 days.

According to data from encrypted data aggregator Skew, Bitcoin is currently down nearly 46% this quarter.

Data shows the quarterly returns of Q2 Bitcoin this year have reached the same level as the first quarterly bear market in 2018. Bitcoin fell by 45.91% in Q2 this year, slightly better than the 49.89% loss of Q1 in the 2018 bear market.

Long-term Bitcoin holders are still at a record-high

Despite the falling Bitcoin price, long-term holders are not relenting in their quest to accumulate more coins because they are still at an all-time high. Data science firm IntoTheBlock acknowledged:

“Just a reminder that despite the recent downwards price action, the number of Bitcoin hodlers is currently at an all-time high. 58.41% or 22.22 million addresses are holding BTC for more than one year.”

Market analyst Michael van de Poppe echoed these sentiments. He explained:

“Long-term holders of Bitcoin are accumulating again, heavily. Short-term holders of Bitcoin are selling again, heavily. It always goes like that.”

As the battle between long-term and short-term Bitcoin holders continues, it remains to be seen how the leading cryptocurrency plays out going forward.

Bitcoin Short Term Speculators Blamed for the Investor Group Realizing Most Losses

Over the past week, Bitcoin’s brief drop to the $28K level, triggered by a series of intensified crackdowns on crypto mining from Chinese authorities.

Bitcoin short term investors have been blamed for the primary culprits in the recent crash of the crypto market, as acknowledged by Yann & Jan. The Glassnode co-founders explained:

“The Bitcoin investor group that is realizing most losses is the short term speculators.”

On-chain analyst William Clemente III echoed these sentiments. He noted:

“Short-term BTC holders capitulating.”

Earlier this month, the analyst stated that long-term Bitcoin holders kept stacking while their short-term counterparts kept selling.

On June 25, the net realized losses hit an all-time high (ATH) of $3.45 billion. Lex Moskovski, the chief investment officer at Moskovski Capital, pointed out:

“Yesterday’s Net Realized Profit/Loss was the largest of all times. $3.45B of net realized losses. Ouch. Even March, 2020 wasn’t so bloody.”

Bitcoin active addresses experience a slight growth

According to on-chain metrics provider Santiment:

“Bitcoin is rebounding again, and active addresses are growing slightly following the massive 50%+ drop from the April ATH. Our active address divergence model shows that though a price drop made sense, address activity hasn’t dropped as much.”

This could, therefore, signify that the Bitcoin network is regaining the much-needed momentum because the market crash witnessed from May drove its price from a record-high of $64.8K in mid-April to the recent lows of $28K.

Meanwhile, a st rong resistance pushing BTC on its path towards $40K lies at $37K. Data science firm IntoTheBlock recently acknowledged:

“Strong resistance ahead for BTC on its path towards $40K. The IOMAP reveals 3 key levels of resistance, the biggest located at the highly contested $37K mark, with 942K addresses holding 427K BTC.”

IntoTheBlock added that a $40,000 Bitcoin breakout would be instrumental in triggering an upward push in the crypto market.

Therefore, it remains to be seen how the leading cryptocurrency plays out moving forward.

ETH Holdings on Exchanges Drops Below 18% in 31 Months

The second-largest cryptocurrency Ethereum regained momentum recently after breaking through the psychological price of $2,100. ETH was down by 3.58% in the last 24 hours to hit $2,035 during intraday trading.

Ethereum has been trying to renew its upward momentum following the recent market crash, which saw its price nosedive from an all-time high (ATH) of $4,350.

ETH holders are still confident that an uptrend is in the offing as they have been withdrawing their holdings on crypto exchanges in droves, as acknowledged by Santiment. The crypto analytic firm explained:

“Ethereum holders continued to make history by lowering the percent of ETH held on exchanges to its lowest ratio since November 2018. Dropping below 18% for the first time in 31 months lowers the risk of a future major selloff.”

Holding is usually bullish because investors withdraw their cryptocurrencies from exchanges and keep them in digital wallets or cold storage for future purposes.

A shift to Ethereum’s POS could fire up the $40 billion staking sector

According to JP Morgan analysts, a transition from the current proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) in the Ethereum network could jumpstart the $40 billion staking industry.

They acknowledged that staking is already generating revenue worth approximately $9 billion in the crypto industry.

Ethereum 2.0 was launched in December 2020 to kickstart this transition.

Ethereum outperformed Bitcoin in Q1 and Q2 of 2021

According to market insights provider unfolded:

“Despite high correlation with Bitcoin, Ethereum outperformed BTC in Q1 and Q2.”

As the debate on whether Ethereum will one day outdo Bitcoin, ETH’s daily active addresses recently surpassed those of BTC for the first time in crypto history.