𝗧𝗿𝗮𝗱𝗶𝗻𝗴 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆: 𝗪𝗵𝗮𝘁 𝗶𝘀 𝗖𝗿𝘆𝗽𝘁𝗼𝗰𝘂𝗿𝗿𝗲𝗻𝗰𝘆 𝗧𝗿𝗮𝗱𝗶𝗻𝗴 ⁉️
Let's look at what crypto trading is and how it is different from other types of trading.
At its core, trading on the cryptocurrency market is very similar to working with CFDs, stocks or currency pairs. The main difference is that cryptocurrencies are used as the trading instrument.
The essence of crypto trading is buying digital currency and then selling it at a higher price. So a crypto trader’s job is quite similar to that of their colleagues on the currency or stock market.
Crypto markets are often analyzed with the same technical analysis methods as the fiat currency markets. Many traders prefer to trade bitcoin based on trading volume and indicators and often use modified classic trading strategies.
However, from the point of view of fundamental analysis, the cryptocurrency market can present a few challenges. Digital assets can fluctuate dramatically due to various events: deviation from the project development plan, forks, an increase or decrease in exchange trading fees, a sharp change in the popularity of the coin among miners, etc.
At the same time, cryptocurrency quotes are highly dependent on the dynamics of the price of bitcoin. This digital asset occupies a large part of the market: about 50% of all transactions are carried out with bitcoin. Therefore, BTC is the underlying market that sets the trend for the entire industry.
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