Trading Bitcoin (and any other assets) is based on two methodologies: fundamental and technical analysis of the market.
Fundamental analysis works with general concepts, covering the global picture of what is happening. In the case of Bitcoin, the fundamental analysis evaluates the entire cryptocurrency industry: news, technical developments (for example, the Lightning network), market regulation in the global community, and any other information or problems may affect the success of Bitcoin.
This methodology considers the value of Bitcoin as a technology (regardless of the current price) surrounded by external factors (to determine what happens to the price next).
Bitcoin Rejoin offers online services where sales transactions are concluded automatically. Do not confuse exchanges with Bitcoin companies that directly sell digital coins to customers and charge a fee for their services. Also, exchanges cannot be equated with trading platforms like Local Bitcoins, where buyers and sellers communicate directly with each other, concluding transactions.
The advantages of cryptocurrency
The advantages of cryptocurrency include the following positive aspects:
- Availability of cryptocurrency – electronic money at any time.
- At the same time, it is impossible to freeze an account or withdraw cryptocurrency.
- At any time, you can verify the accuracy of the operations performed.
- Open source code. Thanks to this feature, everyone can get virtual coins.
- Only the wallet number and limited data on the amount on the account are available.
- People run online exchanges of non-P2P crypto – they can be exploited by governments through the imposition of regulatory restrictions.
- The payment can take up to ten minutes to appear if you use a wallet on your mobile or your computer.
Order Log in Bitcoin
The full list of orders for the purchase and sale of assets is recorded in the market order book, which can always be seen on the exchange. Purchase orders form an “offer/request (bids) since users offer Bitcoin prices. Sell orders form an “offer” (asks) as they reflect the price that sellers of assets ask for.
It is an important nuance inherent in cryptocurrency trading. Sometimes, the price of Bitcoin in different countries can differ significantly from the price in the United States, since bidders at leading exchanges will be different, the trader explains.
In addition to price, you will also come across concepts such as high ( high ) and low ( low ) level. The highest and lowest prices characterize these categories in the last 24 hours.
Another important term is the volume of the market. It characterizes the total number of Bitcoin transactions that were concluded in a given period. A pronounced tendency (trend) in the market is usually accompanied by large trading volumes and a weak (fluctuation/adjustment) – by low volumes.
A change in the price, then the analysis of the trading volume will be the right decision.
Slight correction of the market or the beginning of the opposite trend.
Now, knowing most of the working terms that you may encounter on an average exchange, it’s time to get acquainted with the main types of orders placed on the market.
Types of Orders used in Bitcoin
A market (instant/current) order (instant order) is an order that will be executed immediately upon reaching the conditions of the transaction you have specified.
If you place a market order to buy 5 BTC, the exchange will look for the “cheapest” sellers (within the given position) until it collects the required number of crypto coins. In other words, in the end, you can get 3 BTC at one price, and the remaining two at a higher price. With a market order, you cannot refuse to purchase until the order is closed.
With market orders, you can pay more than you planned, so be careful when choosing the terms of the position, the expert warns.
Meanwhile, with limited orders (limit order), you can buy or sell Bitcoin at a price you determine yourself. In other words, this type of order may not be executed in full, as there will not be a sufficient number of buyers or sellers capable of satisfying your requirements.