Bitcoin Rally Continues – Take the Bull by the Horns With TradeOr
As bitcoin continues to climb, traders are looking to take the bull by the horns in the crypto markets. Learn more on trading bullish markets.
Introduction
Digital gold, the king of crypto, or the future of finance. Bitcoin is described in many ways, but one thing is for sure: it has been a major celebrity of 2021.
The year has seen BTC hit new peaks and hold higher territory for record periods of time. As of October, (or Uptober, as it’s fondly known in the crypto-world), the SEC approved the first ever Bitcoin ETF for trading on the NYSE. In addition, the coin has smashed its ATH for the second time in the year. Evidently, bitcoin’s bull-run is in full flow. Demand is increasing across the board as veteran and newbie traders alike seek to cash in on the crypto.
Nevertheless, some traders still have questions regarding cryptocurrencies and their bulls and bears. What does the future hold for the industry? How can you cope with the crazy volatility? And is now the time to take the bull by the horns?
What’s The Difference Between Bull And Bear Trends?
First of all: what do bull and bears have to do with markets?
Bull and bear trends refer to significant price movements in a specific direction: positive for bulls, and negative for bears. Supposedly, the terms reflect each animal’s preferred mode of attack. Bulls charge and toss upwards with their horns, whilst bears are more protective and swipe downwards with their claws. Historically, Californian pioneers organized deadly show fights between bulls and bears!
What Is The Meaning Of A “Bullish Market”?
Not every upward or downward price movement constitutes a bull or bear trend. For trends to qualify, we expect to see an overall price change of at least 20% over a period of at least two months. Generally, movements smaller than this are classed as temporary market corrections or fluctuations.
The momentum of the trends may vary, but with increasing prices, bull trends display higher highs and higher lows. As prices fall, bear trends present lower highs and lower lows.
So what does a bullish market mean for bitcoin?
In simple terms, as demand increases, price rises. In the case of bitcoin and some other cryptocurrencies, a cap on the total number of coins available (21 million coins for bitcoin) enhances demand because supply will limited. This explains why bitcoin’s value increases over long periods of time: there are fewer coins left to mine whilst demand remains high.
But, as we’ll see below, this isn’t the full story.
Why Is Bitcoin Bullish Now?
As of November, the bulls have gathered pace for the second time in 2021 and recorded yet another ATH.
Numerous events spurred on the bulls this year. 2021 saw crypto emerge decisively from the internet underground into the mainstream and real-life application. Cryptocurrency is no longer just another subject of Elon Musk’s Twitter stream-of-consciousness. It is of serious interest for central banks, politicians, and regulatory bodies. In the case of El Salvador, bitcoin has even been adopted as legal tender. This uptake and interest suggests that cryptocurrency as a whole is here to stay and making inroads in our financial infrastructure.
That’s not to say it’s been plain sailing for the crypto industry. Prices plummeted in early September when China announced a devastating ban on all crypto transactions and exchanges. Although this setback showed crypto’s vulnerability to political interference, crypto enthusiasts were heartened to see the industry bounce back strongly. Indeed, with each challenge so far, the industry has evolved and survived.
In contrast to China’s repression, plenty of other governments are interested in integrating and utilising crypto. The approval of the ProShares Bitcoin ETF exemplifies how bitcoin real-world credibility grows with each regulatory hurdle it overcomes. Moreover, the ETF directly influences bitcoin bullishness because it allows more investors to interact with the asset. Even crypto sceptics have to concede that this is a watershed moment in the financial world.
How Can I Trade Bitcoin In A Bullish Market?
The principle of trading in a bull market is to buy early in the trend (at a lower price) and attempt to sell near the peak.
But before you get carried away with dreams of becoming the next bitcoin millionaire, remind yourself of the immense volatility attached to crypto! Even in the strongest bull or bear trends, nothing can be taken for granted. As with every asset and every single trade you place, risk management, strategy, and emotional control are of critical importance.
In particular, the crypto industry is prone to intense emotional hysteria. All too often, “FOMO”, or “Fear Of Missing Out”, dictates traders’ decisions and causes them to leave their meticulously detailed strategies by the wayside. Even now, as bitcoin seems “moon-bound”, you may well be feeling FOMO and persuading yourself that it’s now or never to invest!
But step back and take a breath: it’s better to take time to make an informed decision than to rush into one you’ll later regret. Firstly, you’ll need to decide how you want to approach the market according to your goals. Generally speaking, you have two options:
- HODL – “Holding On for Dear Life” refers to the practice of long-term investment in crypto. You’ll have to keep your nerve through price fluctuations and trust that you’ll be rewarded in the months or years to come.
- Trading – This encompasses all strategies that aim to make profit through trades over the short term. Savvy traders can make a virtue of crypto’s volatility by timing their trades with trends and reversals.
So HODLers are essentially optimists who invest in the long term, bullish potential of cryptocurrencies. Meanwhile, (day, swing, or position) traders and scalpers are more focused on immediate price trends.
Where Can I Trade Bitcoin?
One of the most effective means for trading in this way is through CFDs, or Contracts For Difference. Instead of taking ownership of a cryptocurrency, CFD traders speculate on the price difference between the open and close of their order. Because of this, they are able to go both long (buy) and short (sell) without having any crypto in their wallet. Not only can traders profit from bullish or bearish price action, they can also use leverage to amplify their trading position with less of their own capital. Of course, leverage also exposes traders to extra risk if prices turn against them, so risk management is crucial.
If you’re an aspiring HODLer, it’s important to find a reputable exchange for purchasing bitcoin. When choosing an exchange, remember to consider security, fees, and ID requirements, and also research secure wallets for extra protection.
But if you’re a trader interested in gaining exposure to bitcoin through CFDs, TradeOr has you covered. TradeOr’s platform combines superior security with industry-leading technology in an intuitive, user-friendly interface. Our inbuilt features make it easy for you to stay on top of your bitcoin trades:
- Customise your watchlists to track bitcoin alongside your other favourite assets.
- Tune your charts and technical indicators to your style of analysis
- Stay up to date with the latest news and industry developments.
- Set stop losses and take profits to contain your risk on every trade.
An Altcoin Bull-Run
If you’re itching to join the bitcoin bull-run, you might also consider adding some other altcoins to your portfolio. Obviously, diversification of any kind allows you to spread risk and expand profit potential. However, when bitcoin is booming, altcoins also tend to follow suit, so you can capitalise on major price movements across the entire crypto industry.
Of course, that’s no to say that altcoins will always follow bitcoin’s trajectory. With developments ranging from faster transaction speeds to smart contracts and Decentralised Applications, we’re likely to see altcoins entice their own bulls going forward. This is another reason that diversification can help you reap more crypto rewards in the years to come.
TradeOr currently offers 18 of most prominent crypto players, including ether (ETH), Binance (BNB), Ripple (XRP), and Dogecoin (DOGE). That means you can effortlessly enhance your crypto exposure and also stay up to date with the latest crypto news and insights!
Final Thoughts
The current crypto bull-run represents history in the making. With every challenge it overcomes, bitcoin sets an example for other digital currencies to follow. It can’t be denied that 2021 has been a remarkable year for crypto evolution and adoption.
Like all bull-runs, however, the current trend is not permanent. In order to trade cryptos successfully, you need to keep an eye on the fundamental market developments and always practice risk management. Crypto is exciting, fun, and unconventional, but it can also be chaotic and erratic, so never take the bulls for granted!
Start trading bitcoin and altcoins the smart way. Sign up or log in to TradeOr today!