Cryptocurrencies in 2017 was a much easier time to make money in cryptocurrencies. 2018 has been a completely different story. People who don’t know anything about trading cannot make money anymore. You actually need to have a trading plan, risk management, and trading setups to capitalize in the cryptocurrency markets this year. Now that the markets have taken a downturn and started to consolidate, there are numerous short selling opportunities in the cryptocurrency markets. You need to know how to short Bitcoin and other cryptos to be able to capitalize in this year’s market conditions. Here is where and how you can short Bitcoin and other cryptocurrencies.
Where To Short Sell Cryptocurrencies
Most cryptocurrency brokers do not allow you to short Bitcoin and other cryptocurrencies. This is do to their extreme volatility. Short selling can result in you actually losing more money than what’s in your account, due to the fact cryptocurrencies (and any other asset class) can go up forever. If you don’t have sound risk management strategies, don’t try to short cryptocurrencies.
Kraken is the best exchange to short cryptocurrencies at the moment. They are one of the few exchanges that actually lets you short cryptocurrencies vs USD. Until a month ago, the Kraken platform had numerous issues that made trading on it a huge pain. It’s executions were horrible, and orders would rarely go through. However they seemed to have resolved their executions recently, and now orders actually get filled. This is the best exchange in my opinion to short Bitcoin and other cryptos at the moment. Learn more about how we short cryptocurrencies and our thoughts on the current market conditions in our recent Cryptos with Kunal episode:
Never Chase Weakness When Shorting Cryptocurrencies
You never want to chase weakness to the short side or strength to the long side when trading volatile assets like cryptocurrencies. New traders without much trading experience always want to chase. You need to actually do the exact opposite of what your instincts are telling you. Almost every trader has been in the position where you buy something and then it immediately reverses on you. To minimize the chance of this happening, you want to be shorting on pops on cryptos in a downtrend, and buying dips on cryptos in an uptrend. This will give you a lot better risk versus reward on your trades. This will make your winners bigger and your losers smaller.
Notice Which Cryptocurrencies Are Demonstrating Relative Strength
Most cryptocurrencies right now are following Bitcoin’s trend. There is no obvious trend right now, and most are just trading in ranges. There is really no edge to the short or long side at the moment. The two cryptocurrencies showing the most relative strength to their peers are NEO and Litecoin. Both of these cryptocurrencies have broken out of their ranges to the upside, and are consolidating in a bullish manner in the higher part of their ranges. These cryptocurrencies seem the most likely to have more upside in the upcoming weeks and months. Keep them on watch for moves to the upside.
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Kunal Desai is an American day trader (stocks and cryptos) and founder of Bulls on Wall Street and Bulls on Crypto Street, two online trading academies and informational publications. He has been featured in many high profile publications like Inc, Forbes, Buzzfeed, and Fortune. He has spoke at trading and business events all across the World.