5 Winning Strategies For Bitcoin Trading

by Sachin

The Bitcoin market is showing no indications of slowing down any time soon. To succeed in the BTC market, however, you must comprehend the basics of trading strategies. 

The Bitcoin Market

The goal of a Bitcoin trading strategy is to generate profits in the Bitcoin market. Many individuals believe that the Bitcoin market is an incredibly easy industry to pursue. This is the primary reason they fail. On the other hand, some individuals learn to trade. After gaining fundamental knowledge on how to buy Bitcoin and trade it, these individuals see the value of strategies. 

Traders can’t succeed by relying only on technical or basic research. It’s also important to get familiar with various strategies and how to use them.

Best Bitcoin Trading Strategies

No one can promise that you’ll be able to earn millions trading Bitcoin over time. However, you can make sure that you don’t lose by using a trading strategy. The ideal trading strategy is tailored to your specific objectives, risk tolerance, and financial resources. 

Here are some strategies that gain traction among Bitcoin traders: 

  • HODLing

Perhaps the most well-known Bitcoin technique is called ‘HODLing.’ The word ‘HODL’ was first used in 2013. It’s not an abbreviation for a complicated trading technique. It’s just a typo for the word ‘hold.’ It has now developed into a strategy centered on holding Bitcoin in the hopes of seeing its price rise over time and return to its previous highs. 

The idea is straightforward: hold your Bitcoin in the expectation that the value will rise, allowing you to greatly profit from it. Although this isn’t a sophisticated trading technique, it may be a good recommendation for novice traders. 

  • Hedging

Hedging is the process of initiating strategic transactions to mitigate or eliminate the risk associated with current holdings. Investors who currently possess BTC may hedge their investment if they think the market will see a short-term drop. In this instance, you’d hedge an existent position in Bitcoin by establishing a short position.  

This strategy entails selling the asset at its present market price in the anticipation that it would fall. You can then repurchase it at a lower price when the market value falls and earn on the difference. This means that the income would compensate any loss on your initial Bitcoin investment on your short Bitcoin transaction. 

Additionally, you may hedge your positions using contracts for difference (CFDs). This means you’re hedging derivatives rather than real Bitcoin. In such a scenario, you’ll keep your Bitcoin in the long-term expecting that the price would rise, but you’ll also create a CFD betting on the price dropping. 

Last but not least, you may hedge your risks by purchasing Bitcoin futures. These are agreements between two entities to exchange Bitcoin at a predetermined value on a specified future date. Regardless of whether the value of Bitcoin has increased or decreased in that period, you’ll execute the transaction and accept either the profit or loss. 

  • Trend Trading

Trend trading is a technique that’s based on present Bitcoin patterns. The strategy works well for a range of timeframes since you keep your trade available as far as you think the pattern will keep going. 

Bitcoin, in and of itself, is a trend for people. The pattern is fueled by people’s desire to avoid missing out on the next great thing. Due to its popularity, traders in the trend market must remain informed about things that may affect the price. 

In this case, technical analysis may assist you in making an informed judgment. This analysis utilizes a variety of markers, including the relative strength index. 

  • Breakout Trading

In many ways, breakout trading is like trend trading. The distinction is that you’d want to acquire or sell Bitcoin at the onset or conclusion of a trend. The approach is predicated on the premise that if a market breaches critical support or levels of resistance, substantial volatility will follow. 

To start, you must first comprehend support and resistance levels. These are commonly known as the Bitcoin value graph’s floor (support) and ceiling (resistance). Put another way, these are the price levels at which Bitcoin will neither fall nor increase. 

The marks at which such levels are breached upwards or downwards are referred to as ‘breakout points.’ Typically, when this occurs, the price becomes very erratic. The key is to accurately predict what’ll occur next. 

There are many techniques for determining support and resistance levels. This includes examining volume levels and the relative strength index. Once you understand this, you may place a transaction to purchase or sell at a reasonable price point. 

  • Dip Strategy

The dip strategy is among the most well-known strategies for trading Bitcoin assets. This strategy requires the trader to know when the Bitcoin value has decreased, which is the best time to buy. The optimal time to acquire Bitcoin assets is during a recession. 

Purchasing Bitcoins at a discount enables you to recoup a significant amount of money if the price spikes. Many use this technique during the epidemic, when Bitcoin’s value dropped for a while and then soared, reaping enormous gains. 

What To Know Before You Trade

Before you get right into trading, there are still a few things you should know. It’s simple to begin trading Bitcoin, but mastering the skill is more difficult. 

  • Research Your Chosen Strategy

While the overview given above does present an accurate picture of each strategy, it doesn’t reflect all aspects of the approaches. Make sure you research well before making any commitments. Bear in mind that no strategy, no matter how popular, is risk-free. 

  • Make A Trading Plan

Once you’ve decided on a strategy, you need to develop a trading plan. As with any other business endeavor, it’s critical to establish parameters for winning and losing. 

  • Mitigate Your Risks

Before you begin trading, it’s critical to understand how to control your risk. Stops and limits should be used to determine the terms of your transactions in a risk mitigation approach. 


Most of these strategies might seem simple to implement yet they all need constant attention. It’s critical to be aware of all possible outcomes. A thorough examination of each of these strategies would assist in determining which is the most effective in mitigating loss.

You may also like