The crypto markets come alive with volatility
It speaks to quasi-regulation, a factor that could change the game and something the market is rightfully nervous about. However, this news flow alone is not the factor that derails the project in any capacity.
Looking at the volatility and movement in Crypto today there are a few points that jump out.
1) While the percentage changes seem huge, for those who have not been brought up solely on Crypto and digital assets, and have cut their craft trading more traditional financial markets, these moves seem outrageous. However, one thing is clear when we’re talking about Crypto – our perception of movement must adjust accordingly. When a market can move 1,262% in a year, what's a 10% sell-off between traders?
2) When we see this sort of range expansion in price and the extent of intra-day reversals playing out, it re-enforces the idea that CFDs are one of the best vehicles for retail traders to capture opportunity in Crypto. Notably, as CFDs offer the flexibility to profit from moves higher and lower in price, and typically the hold times for positions are hours not weeks. Pull up a 5-minute chart and see the conditions for scalpers and ultra-short-term traders to trade – with top of book spreads coming in, the ability to trade short-term has greatly improved of late.
3) Flip to a daily chart in Ethereum and Bitcoin cash – price in many of these markets have been printing lower highs, but there's no shortage of buyers and the buy-the-dip crowd is still firmly in the mix - the resilience of the bulls is there for now. That said, the trend in Bitcoin is lower now and a close through 50,305 (the 25 March swing low) would heighten the probability of a move to 44000/40000.
It promises to be an interesting few days for Crypto traders and a re-run of last Sunday’s volatility is a real prospect and our weekend trading in Crypto CFDs allows for traders to capture the volatility and opportunity, and manage the risk in open positions with greater control. Take the time frame in, watch the flow and get ready to trade the opportunity.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.