Bitcoin: It Is All About Buy Low And Sell High

The total cryptocurrency market capitalization is sitting under $300 billion as the digital assets continue to get crushed leading Bitcoin and Altcoins lower. Bearish red volume is creeping up signalling a significant increase in selling confirming the strong bear trend present since December. From a technical standpoint Bitcoin looks weak, breaking critical support levels sending price headed towards the next major support around $6,000. Fundamentals are improving with progress stretching from ETF launches to regulatory progress, with the market still remaining bearish.

From a technical standpoint for Bitcoin, the price has broken towards the downside out of the symmetrical triangle pattern. This is a bearish sign and if the price stays below this pattern, the downtrend would continue.

“Buy low, sell high” is possibly the most famous adage about making money in the stock markets, and it’s so obvious it sounds like a joke. In reality, it’s a lot easier said than done.

Behind the truism is the tendency of the markets to overshoot on the downside and the upside. Part of the reason is a pure herd instinct that can drive any stock’s price. The investor who stands aloof might be able to see the herd instinct at work and take advantage of the extreme ups and downs that it causes. That investor can buy low and sell high.

Unfortunately, it’s easy to determine after the fact whether a price was too low or too high and even why.

In the moment, it is monumentally difficult.

Prices both affect and reflect the psychology and emotions of market participants.

For this reason, “buy low, sell high” can be challenging to implement consistently.

This post will cover the basics of Bitcoin trading.

It will help you get familiar with basic terms, understand different ways to “read” the market and its trend, make a trading plan and to learn how to execute that plan on Bitcoin exchanges. Finally I will go over some common trading mistakes.

Bitcoin trading is the act of buying low and selling high. Unlike investing, which means holding Bitcoin for the long run, trading deals with trying to predict price movements by studying the industry as a whole and price graphs in particular. Successful trading requires a lot of time, money and effort before you can actually get good at it.

That’s Bitcoin trading in a nutshell. If you want a really detailed explanation keep on reading.

I am new to Bitcoin but I’ve been reading quite a lot about it.

One thing I’m not sure so far is to how to trade daily using Bitcoin.

I’m normally in the long game but I follow the trends and predictions throughout the game and I want to experiment with some of my Bitcoins to do daily trading, buying low and selling high.

But the problem I see with that is the transaction fees imposed by websites like Coinbase. If every time I’m going to pay several bucks for short term trading, that cost would oy outgrow any possible revenue I make.

I don’t recommend Coinbase, the fees are high and the spreads are large. Once you have Bitcoin, you’re free to use exchanges all over the world.

The following is a write-up of the speech that I did for bitfwd on Friday 20th at UNSW on arbitrage.

It has been edited for conciseness and formatting.

The corresponding slides can be found here.

It is aimed at those with relatively little exposure to finance and cryptocurrency and want to get started with trading. I talk generally about one type of trading strategy — arbitrage — and how you can get started here. Apologies if I oversimplify some concepts — I aim for clarity and a stepping stone, rather than technical depth.

Feel free to email me at if you have any questions. Thanks!

Arbitrage is when you buy and sell an asset at pretty much the same time to make a profit from the price difference.

“I think the reason people buy high, besides the fact that they are investing on emotion, is because they don’t know how to value a business.”(Getty Images)

In mid-2016 the price of bitcoin was about $580. Fast-forward to December 2017 and the cryptocurrency has roared past the $17,000 mark. To put that in perspective, had an investor anted up roughly $6,000, those 10 bitcoins today would be worth $175,000.

Not bad for an 18-month wait.

And so comes the temptation that any level-headed market maven will ignore: Is it time to buy into bitcoin – or any soaring commodity, for that matter – when the price hits an unprecedented, giddy peak?

The answer any seasoned value investor or buy-and-hold guru will give is an unequivocal “no.” But the same financial market that brought you the term “irrational exuberance” oft chases fantasies of a bottomless punchbowl.

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