Yesterday, Bitcoin broke through the 100,000 mark, reaching a new historical high of $104,088, confirming that the bull market is still ongoing! The excitement in the cryptocurrency market has risen again. In fact, this bull market can be said to have started in October. The earliest signals were Bitcoin and Dogecoin. Dogecoin rose from $0.1 at the beginning of October to $0.479 on November 23, with a staggering increase of 470%. Dogecoin's explosive growth has boosted interest in cryptocurrencies, and many newcomers to the market's first question is: How to buy Dogecoin? Today, I will write about how to mitigate risks in the cryptocurrency market to help everyone avoid pitfalls!
One, Find Trading Platforms
Everyone needs to choose trading platforms carefully. The most commonly heard names are OKEx and Binance, which are indeed the most used exchanges. OKEx is recommended for its simple interface, making it suitable for beginners. Binance has a large user base and high trading volume, and it is not very complicated to operate. There are also others like Huobi and ZB.com, which we often use. I recommend sticking to these because they have a large number of users and high trading volumes. Do not easily trust someone who claims to guide you and then leads you to a shady platform to deliberately incur losses. If they tell you something is on a non-mainstream platform, it's not reliable (you can pay to get listed on non-mainstream platforms). Recently, there was a theft on the DEXX platform; such situations often occur on smaller platforms, but some platforms may also engage in self-theft or even run away with the funds.
Two, Understand the Trading Patterns in the Cryptocurrency Market
You may not know the money-making models in the cryptocurrency market until you enter. Once you do, you will find that there are indeed many ways. I will analyze a few representative ones for everyone.
1. Spot Trading:
Spot trading is a way to buy or sell cryptocurrencies directly on the exchange. This type of trading allows investors to purchase specific coins and hold them until they sell. In simple terms, it's similar to domestic stock trading, where you buy low and sell high to earn the price difference. For example, if you buy Bitcoin at 5000 and it rises to 6000, you earn the difference. However, if it falls to 4000, you lose 1000. But if you don't sell and hold onto the coin until you are satisfied with the selling price, you can still make a profit. This trading model has a low threshold, but if you can analyze market trends and make the right trades, you can earn money. It's important to maintain a good mindset; you shouldn't buy and then obsessively watch the price, selling at a loss if it dips. This can lead to frequent buying and selling, where you miss out on profits and incur losses when you sell at a loss.
Spot trading cycles are relatively longer. In the current bull market phase, it can yield returns in as little as 1-3 days, while slower trades may take 5-10 days. In a bear market, you need to adopt a medium to long-term strategy, which could take a few weeks to even several months.
We are now in the second phase of the bull market. Many opportunities are available right now, and if you do well, you can position yourself for potential doubling coins. If you don't do well, there is also a high chance of getting stuck at the peak.
2. Contract Trading:
Contract trading is a way to trade cryptocurrencies using financial derivatives, allowing investors to interact with the market through contracts without holding actual cryptocurrencies, to earn profits from price fluctuations or to hedge risks. In simple terms, it's buying and selling in both directions; you make money if you buy in the right direction and lose if you sell in the wrong direction. Contracts have leverage; some have 10x leverage, while others can go up to 100x. Leverage has its advantages and disadvantages: it can help you expand your capital, allowing you to buy more significant coins with a small amount. However, it also increases risk, expanding the chance of liquidation. When your losses in contract trading drop below your margin, your account will be liquidated, leaving you with almost nothing. For contract trading, the threshold is high, and the risks are significant. It requires studying market trends, controlling entry and exit points, and managing reasonable position sizes. There is a saying in the cryptocurrency market: the end of contracts is liquidation, so it is not recommended for beginners to engage in contract trading!
Three, What pitfalls are there in the cryptocurrency market?
1. Those who promote platforms to you
As mentioned before, trade on large platforms (OKEx, Binance). Many who promote small platforms will act like big shots in front of you, showing you exaggerated account balances and impressive win rates in trading records. Then they will say they want to guide you. Is everyone really that good? Perhaps they are eyeing your money.
2. Shitcoins or garbage projects
Good projects do not need promotion; they will be mentioned on project websites or important news in the cryptocurrency community. Those promoting shitcoins to you claiming hundreds or thousands of times in returns and potential should not be trusted. It's true that there are projects with those returns, but you might need to invest tens of thousands to find one, which is purely a matter of luck. Most will either approach zero or the project will run away; don’t invest in projects you don’t understand!
Four, Deposit and Withdrawal
This is also a headache for everyone. It is recommended to find high-volume traders on OKEx or Binance for transactions. When depositing to buy USDT, there are usually no issues, but when withdrawing, make sure to use high-volume traders to prevent your account from being restricted.
Do not easily trust people who offer offline withdrawals.
Speaking of which, let me recommend three projects with doubling potential during this bull market.
1. DOGE
Dogecoin is familiar to everyone. Currently, its price hovers around 0.43. After the last surge, it is now in a consolidation phase. From a technical candlestick perspective, there is a lot of room for growth. More importantly, it has a strong backer (Elon Musk). He frequently supports Dogecoin, which can drive its price up. With Trump officially taking office next month, there may be more positive news for the cryptocurrency market. Elon Musk has also stated that Tesla supports Dogecoin transactions, and if that comes to fruition, Dogecoin's price could skyrocket. In this bull market, it is not a problem for Dogecoin to surpass its historical high of 0.73 from 2021. With additional positive news, it could break the 1 USD mark.
2. MORPHO
MORPHO is a newly launched coin that generated a lot of excitement when it was released; many friends might have been trapped at its peak. However, from December 3 to today, its performance has been excellent, with nearly a 100% increase. MORPHO is a rising star in the lending protocol space, backed by $2.1 billion in capital, making it very strong. With AAVE as a benchmark, MORPHO aims to compete for AAVE's market share. So, those trapped shouldn't panic; this is a good opportunity to average down. The future potential is robust, and if you want to hold a coin for the long term in a bull market, I recommend MORPHO!
Investing always comes with risks. If you want to lower risks and increase returns, follow me, and let's discuss and explore together! I am Brother Lei, code name: Stability! I have been focusing on the cryptocurrency market for seven years, deeply researching primary projects and secondary markets. Get to know more quality primary project information and recommendations for secondary buying and selling points. I am here to safeguard your investments in the cryptocurrency market!