As far as cryptocurrency trading in 2022 is concerned, you must have an open mind when investing in the unpredictable market.
The market is famous for producing instant millionaires and equally wiping out portfolios clean.
Such events make government and financial market regulators lose sleep since people are clueless about formulating frameworks or guidelines to protect investors.
Aside from the ongoing discussions to regulate these digital assets, cryptocurrency developers are constantly introducing new coins and tokens traded in several exchanges worldwide.
In addition, emerging crypto trading exchanges are busy releasing tools and bots to help traders enjoy the price swings in the market.
So, it’s wise to be mindful of market capitalization and the traded volume of each digital asset.
Read on to know what works in crypto trading and what doesn’t in 2022.
Here’s What Works In Cryptocurrency Trading In 2022
Crypto Arbitrage
Since several exchanges offer access to the cryptocurrency trading floor, market inefficiency gaps create lucrative opportunities for traders.
The ideal is catching the cryptocurrency price when it’s low in one exchange and selling it high in another.
Crypto arbitrage has several underlying strategies like cross-exchange arbitrage that are less risky for investors and traders.
You must keep up with the market price fluctuations experienced during volatility.
You can visit increditools.com to find tools to help you carry out this strategy.
However, experts advise newbie and experienced investors to keep a five percent investment in the cryptocurrency market.
It helps your portfolio to withstand the shock waves of crypto market volatility.
Trading Autopilot
If you would like to participate in the market through a proxy, trading cryptocurrency on autopilot might be the best plan this year.
The bots will do the hard work of fundamental and technical analysis of the market and take trading positions.
The trading bots match your trade setup preference or configurations with the prevailing cryptocurrency market conditions.
In such events, they concentrate on profitable trade set up and hunt for cryptos with high trading volume and have significant market capitalization.
However, the cryptocurrency markets are speculative, and the price action is swift.
You need to invest in trustworthy bots and have a stable internet connection to enjoy the market swings.
Read some vital materials regarding the best bots at 3commas reviews before using them in your trading.
Bitcoin Volatility Trading
Bitcoin is perhaps the most speculative digital currency in the cryptocurrency market.
Recently, the price swings surprised many investors on both ends of the market by reaching an all-time high of USD 68,000.
Soon after, the prices came down to USD 30,000 to the value of one Bitcoin.
Your portfolio must have significantly grown if you were strategic with your investments.
Experts speculate that it’ll hit USD 100,000 in the coming months; just hold what you have while hoping for strong tailwinds in the cryptocurrency markets.
In addition, you can deploy options and futures when entering the crypto markets as long as you understand the underlying assets and crypto trading strategies.
Hodling
Hodling is an old practice in the cryptocurrency arena that can still work considering the constant supply of digital assets.
Traders can take advantage and buy them early and target favorable market conditions to sell them off.
However, you must research the underlying digital assets to ensure you’re the right coin or token in your portfolio.
The exposure to risk remains the same since the market is unregulated and highly speculative.
Here’s what doesn’t work
Mining
Since the start of digital currency, the financial implications of setting up a cryptocurrency mining rig are still discouraging to most traders.
It could be due to the competitiveness in solving mathematical problems in a blockchain or the computer network setup and system maintenance.
This year, cloud mining looks more viable for traders who want to leverage the cryptocurrency landscape.
But first, ensure the cloud mining service provider is trustworthy to avoid losing your portfolio.
Mythical Returns Promises
If you’ve been around cryptocurrency circles, you’re familiar with the hype in the market that most newbie investors fall for when entering trades.
Mythical returns or fear of missing out (FOMO) is no longer a driving force for crypto trading.
Experts encourage research before jumping into the cryptocurrency pool to avoid losses since the market has 90 percent failure caused by uninformed investment decisions.
Final Thoughts
There’s always a disclaimer warning investors and traders when entering the cryptocurrency markets.
Not all entries come out with profits, and losing your portfolio is high.
You must be strategic and have appropriate tools like trading bots to navigate the cryptocurrency maze.
In addition, the crypto market is in its infancy, and several pitfalls can endanger your portfolio.
So, consult widely in the cryptocurrency circle to find trending issues concerning crypto trading.