• About
  • FAQ
  • Landing Page
Trade in crypto.com
Advertisement
  • Home
  • Bitcoin
  • Ethereum
  • Live coin prizes
  • Premium Partners
    • HUOBI: our choice for advanced trading
  • DeFi
  • Exchanges
  • Calendar
  • Contact us
No Result
View All Result
  • Home
  • Bitcoin
  • Ethereum
  • Live coin prizes
  • Premium Partners
    • HUOBI: our choice for advanced trading
  • DeFi
  • Exchanges
  • Calendar
  • Contact us
No Result
View All Result
Trade in crypto.com
No Result
View All Result

Bitcoin volatility today? 5 lessons to be learned

Robert (editor in chief) by Robert (editor in chief)
January 27, 2022
in Bitcoin (BTC), strategies
2
Bull-Flip, bears, bulls, Bitcoin volatility
560
SHARES
4.3k
VIEWS
Share on FacebookShare on Twitter

Today it was a remarkable day for Bitcoin traders. After a new all-time high the BItcoin price started to decrease. According to the mainstream crypto media prices crashed. We have a different opinion. In this posts we share 5 lessons that can be learned from today’s Bitcoin volatility.

When you followed the headlines today you might have been shocked by the ‘crash’ of the Bitcoin as reported. We understand, but is this shock legitimate? Here are five lessons to be learned after today’s Bitcoin volatility.

Table of Contents

  • 1. Beware of FUD regarding Bitcoin volatility
  • 2. Concern the snowball effect during volatility of Bitcoin
    • Trading bots will take over
    • (long) options are executed automatically
  • 3. Don’t let emotions influence your trading behaviour
  • 4. Use on-chain metrics to take advantage of increasing Bitcoin volatility
  • 5. Don’t trade during volatility when you’re not an expert

1. Beware of FUD regarding Bitcoin volatility

When you look at the price development of Bitcoin since the first of January of this year we see that, until yesterday, the price rose from $ 28.837,28 (on the first of January) to $ 56.377,64 (the all time high set on the 21st of February). At the moment of writing this article, the price of Bitcoin is $ 53.736,- and that’s equal to the price of last Friday, when the same price was seen as a sign of prosperous bullish behaviour since it was an all time high. So, what crash are we talking about?

2. Concern the snowball effect during volatility of Bitcoin

When volatility occurs there will be a snowball effect. This is caused by two automated mechanisms that will be activated.

Trading bots will take over

A lot of people use automated trading nowadays. This means that trading bots are programmed to buy or sell automatically when a certain price is met. Today that meant that a lot of trading bots have probably sold during the falling of the Bitcoin price and bought when the price of Bitcoin went up again. In this contribution you can learn more about trading bots.

(long) options are executed automatically

When traders are trading in Bitcoin options they’re using a leverage factor. In order to do so they have to pawn their portfolio of assets. When volatility increases like today, the assets will no longer be enough to cover the leverage. At such moment the exchange will execute the value of the portfolio and sell immediately to cover the outstanding costs of the trader. Therefore the availability of cryptocoins rises (since altcoins will be executed as well) which lowers the price further.

These two factors cause a snowball effect which increases volatility on short term.

3. Don’t let emotions influence your trading behaviour

During the most volatile period the Bitcoin nosedived below $ 50.000,- which is considered a psychological barrier. However this was corrected immediately by other parties buying the dip. Since there is a scarcity due to institutional investors stepping in and PayPal users getting more and more active there are more BTC bought than mined per day. So don’t let emotions get you. When we look at the sentiment on social media like Twitter and Telegram we see that there was hardly any increase of negative messages regarding Bitcoin.

Telegram sentiment on Bitcoin
Telegram sentiment on Bitcoin

The same goes for Twitter.

Twitter sentiment on Bitcoin
Twitter sentiment on Bitcoin

4. Use on-chain metrics to take advantage of increasing Bitcoin volatility

When you’re an experienced trader or want to be sure that you’re on the first row when short-term sentiments are changing use on-chain metrics. Below we share some statistics provided by our on-chain metrics partner Intotheblock that show how the Blockchain data showed a change was coming.

Large Bitcoin transactions decreased ahead of Bitcoin volatility
Large Bitcoin transactions decreased ahead of Bitcoin volatility
Decreased number of Bitcoin transactions ahead of Bitcoin volatility
Decreased number of Bitcoin transactions ahead of Bitcoin volatility
Decrease of active addresses before Bitcoin volatility
Decrease of active addresses before Bitcoin volatility

Based on these statistics and many more on-chain metrics provided by Intotheblock, it was clear that a change was coming. Are you curious which on-chain metrics are available for Bitcoin and other cryptocurrencies? Take a look at the site of our on-chain metrics partner Intotheblock.

5. Don’t trade during volatility when you’re not an expert

Trained investors and day traders are fond of volatility because it’s providing a lot of opportunities for multiple short-term profits. However when we consider that the price went down over $ 10.000,- and rose $ 5.000,- again within matter of hours it requires a lot of expertise to take profit of these price difference. Therefore it’s best to not trade during high volatile times when you’re not an expert.

In the end the old saying is true: “a loss is only a loss after you’re sold your assets when prices are down.”

Tags: Bitcoin (BTC)liststrading tipsvolatility
Share224Tweet140

Related Posts

Bitcoin price All time high 20-10-21

Bitcoin and crypto plunge on Russian action. What now?

by Robert (editor in chief)
February 24, 2022
0

As we all know, Russia took military action in the Ukraïn last night. Since then, Bitcoin and crypto prices have...

Jane Street crypto trading secrets revealed by Thomas Uhm

1st time: Jane Street crypto strategy. Learn to win now

by Robert (editor in chief)
February 16, 2022
0

One of our aims is to provide institutional insights for retail investors. Jane Street is such an institutional investor. For...

Elliott Wave Analysis technical analysis

The Elliott Wave Analyses for Bitcoin and crypto explained

by Robert (editor in chief)
January 27, 2022
0

The Elliott wave principle became prominent in 1935 after a startling prediction that the stock market would reach a new...

Bitcoin ETF Trading options

New Bitcoin trading product, regulators acknowledge market

by Robert (editor in chief)
October 26, 2021
0

The Bitcoin ETF seems to have opened up the market perspective. This is going on... Since the Bitcoin ETF introduction...

The Bitcoin crypto snowball

Bitcoin price lowers. 4 ways to profit from a crypto snowball

by Robert (editor in chief)
January 27, 2022
1

Now the Bitcoin price is going south we'll expect a crypto snowball. What is it and how to trade against...

Load More
  • Trending
  • Comments
  • Latest
Bitcoin and cryptocurrencies wrap up

How to trade Bitcoin in uncertain circumstances? 5 Tips

April 27, 2021
profitable Altcoins with high roi,, Ethereum (ETH)

5 steps to pick 100x roi Altcoins for investing [video]

March 9, 2021
CME-gaps all you need to know

CME-Gaps for Bitcoin: this is all you need to know

April 18, 2021
Trading bots cryptohopper

300.000 Trading Bots can’t be wrong…

March 13, 2021
Bitcoin Cryptocurrency exchanges

Bitcoin statistics: Simple and Exponential Moving Average

2
Bull-Flip, bears, bulls, Bitcoin volatility

Bitcoin volatility today? 5 lessons to be learned

2
The Bitcoin crypto snowball

Bitcoin price lowers. 4 ways to profit from a crypto snowball

1
Richard Branson ondersteunt Bitcoin met Space Travel

Richard Branson ondersteunt Bitcoin, accepteert het voor Space Travel

0
NFT Update

NFT update: 5 best sellers, porn star screw over and …

February 25, 2022
Bitcoin price All time high 20-10-21

Bitcoin and crypto plunge on Russian action. What now?

February 24, 2022
Jane Street crypto trading secrets revealed by Thomas Uhm

1st time: Jane Street crypto strategy. Learn to win now

February 16, 2022
crypto advertising Super Bowl 2022

Is Super Bowl crypto advertising profitable? Find out in 5

February 15, 2022

If you (want to) trade in crypto, accurate information is necessary. Therefore we provide you with the latest news, inside stories, analyses and live updates.

Categories (under construction)

  • About us
  • Banken en Beleggen
  • Beveiliging
  • Bitcoin (BTC)
  • Bitcoin ETF
  • Blockchain
  • Crypto exchanges
  • Cryptocrime
  • Cryptocurrencies
  • Cryptocurrencies algemeen
  • Cryptocurrency Exchanges
  • Cryptonews
  • DeFi
  • Editor's Pick
  • Ethereum
  • Ethereum (ETH)
  • NFT
  • Overheid en Politiek
  • Partners
  • Regulations & tax
  • Ripple
  • Ripple (XRP)
  • Sparen & Beleggen
  • Statistics
  • strategies
  • Technologie
  • Uncategorized
  • Wallets

Disclaimer:

Please note that our site does not provide any financial advice. The statistics and information shown are solely provided as a possible source for your own research on (investing in) crypto and/or for educational/entertainment purposes. Despite our efforts to present information in the right and timely manner, we will not accept any responsibility for any shortcomings in the data and/or information provided. Furthermore, please be aware that this site uses affiliate links. This means we might earn a contribution in the costs of operating this site and providing free information if you decide to click on (one of) the links issued.

Site management:

Omnimedia Events (on behalf of third parties), Winthontlaan 200, 3526 KV Utrecht, The Netherlands, contact(@)tradeincrypto.com

Legal links:

  • General terms and conditions
  • Privacy policy
  • Cookie Policy
  • Disclaimer
  • Imprint

We understand you agree with the terms and policies mentioned above by using this site. If not we kindly ask you not to use our services anymore. Please check our policies regularly since they may vary from time to time.

  • About
  • Crypto prizes live
  • Contact us

© 2018 - 2023 Omnimedia Events

No Result
View All Result
  • Home
  • Crypto prizes live
  • Crypto exchanges
  • Premium Partners
    • Advanced trading: Huobi Exchange
  • DeFi: Decentralized Finance
  • Crypto calendar

© 2018 - 2020 Omnimedia Events, Winthontlaan 200, 3526 KV te Utrecht.

Sign up for our free daily TradeinCrypto Update

Don't miss any news, backgrounds, analysis, guides and many more info. Subscribe for free now: 
SUBSCRIBE!
Give it a try, it's free and you can unsubscribe anytime.
  • bitcoinBitcoin(BTC)
    $28,369.002.91% 24H
    BITCOIN
    24H : 2.91%
    Volume : $19,893,228,748.00
    Marketcap : $547,728,985,702.00
  • ethereumEthereum(ETH)
    $1,821.883.94% 24H
    ETHEREUM
    24H : 3.94%
    Volume : $10,913,194,540.00
    Marketcap : $219,159,069,314.00
  • tetherTether(USDT)
    $1.01-0.43% 24H
    TETHER
    24H : -0.43%
    Volume : $31,832,660,750.00
    Marketcap : $78,845,945,005.00
  • binancecoinBNB(BNB)
    $329.131.79% 24H
    BNB
    24H : 1.79%
    Volume : $536,116,770.00
    Marketcap : $51,931,372,451.00
  • usd-coinUSD Coin(USDC)
    $1.00-0.17% 24H
    USD COIN
    24H : -0.17%
    Volume : $6,302,986,681.00
    Marketcap : $34,512,616,428.00
  • rippleXRP(XRP)
    $0.4403.50% 24H
    XRP
    24H : 3.50%
    Volume : $2,199,699,601.00
    Marketcap : $22,364,158,727.00
  • cardanoCardano(ADA)
    $0.3682.10% 24H
    CARDANO
    24H : 2.10%
    Volume : $389,973,610.00
    Marketcap : $12,899,940,635.00
  • dogecoinDogecoin(DOGE)
    $0.0773.30% 24H
    DOGECOIN
    24H : 3.30%
    Volume : $673,779,650.00
    Marketcap : $10,697,149,612.00
  • staked-etherLido Staked Ether(STETH)
    $1,816.393.80% 24H
    LIDO STAKED ETHER
    24H : 3.80%
    Volume : $22,927,342.00
    Marketcap : $10,608,880,683.00
  • matic-networkPolygon(MATIC)
    $1.142.50% 24H
    POLYGON
    24H : 2.50%
    Volume : $395,552,215.00
    Marketcap : $10,381,392,815.00
  • solanaSolana(SOL)
    $22.233.61% 24H
    SOLANA
    24H : 3.61%
    Volume : $505,134,145.00
    Marketcap : $8,518,173,508.00
  • binance-usdBinance USD(BUSD)
    $1.00-0.14% 24H
    BINANCE USD
    24H : -0.14%
    Volume : $4,558,583,381.00
    Marketcap : $8,091,530,500.00
  • polkadotPolkadot(DOT)
    $6.333.02% 24H
    POLKADOT
    24H : 3.02%
    Volume : $179,042,527.00
    Marketcap : $7,681,512,843.00
  • litecoinLitecoin(LTC)
    $93.475.58% 24H
    LITECOIN
    24H : 5.58%
    Volume : $956,235,083.00
    Marketcap : $6,766,415,371.00
  • shiba-inuShiba Inu(SHIB)
    $0.0000111.32% 24H
    SHIBA INU
    24H : 1.32%
    Volume : $195,259,540.00
    Marketcap : $6,386,368,370.00
  • tronTRON(TRX)
    $0.0667.03% 24H
    TRON
    24H : 7.03%
    Volume : $638,522,336.00
    Marketcap : $5,975,156,697.00
  • avalanche-2Avalanche(AVAX)
    $17.563.77% 24H
    AVALANCHE
    24H : 3.77%
    Volume : $232,847,368.00
    Marketcap : $5,713,500,590.00
  • daiDai(DAI)
    $1.000-0.35% 24H
    DAI
    24H : -0.35%
    Volume : $204,929,100.00
    Marketcap : $5,283,566,211.00
  • uniswapUniswap(UNI)
    $6.282.54% 24H
    UNISWAP
    24H : 2.54%
    Volume : $73,871,388.00
    Marketcap : $4,726,641,449.00
  • wrapped-bitcoinWrapped Bitcoin(WBTC)
    $28,371.002.91% 24H
    WRAPPED BITCOIN
    24H : 2.91%
    Volume : $212,795,379.00
    Marketcap : $4,252,549,984.00
en Englishâ–¼
X
nl Dutchen Englishde Germanit Italianes Spanish
Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}