How to make money on a fall in the exchange on the exchange

How to make money on a fall in the exchange on the exchange

11.11.2021

Updated: 04.24.2022

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5 minutes

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In the utopia of enthusiasts, the cost of bitcoin is constantly growing. However, the first coin can show the drawdown and pull most of the market. Few traders know how to play a decrease, but this is not the only way to earn on a fall in bitcoin. If the user prepares in advance for a negative scenario, then he will benefit.

What is a bearish trend in the cryptocurrency market

How to earn cryptocurrencies on a fall

Purchase of assets at low cost

Buying derivatives

Contracts of investment banks

Buying shares, the cost of which depends on the price of BTC

Tips for playing

Summary

Frequently asked Questions

What is a bearish trend in the cryptocurrency market

All traders are divided into 2 groups. Bulls are placed on Long – an increase in position, and bears on shorts – reduction in price. Each group is trying to persuade the cost in their favor. By a bear trend means a long drop in quotations.

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Minor subsidence is called correction. If the price has increased sharply by 20%, the rate will decrease by 2-3%.

The market makes it possible to earn at any conjuncture. It doesn’t matter if the cost is growing or flies down: if the trader knows how to use the entire assortment of investment tools, he will be able to find a profitable deal.

Crypto -rope

Price

Min/max for 24 hours

Volume for 24 hours

Huobi

4.2

$ 37 136.36

Min: $ 36 527.12

Max: $ 40 025.86

18 797.63 BTC

$ 726.52 million

Buy

OKX

3.8

$ 36 966.50

Min: $ 36 376.66

Max: $ 40 029.30

13 727.00 BTC

$ 529.23 million

Buy

Poloniex

4.7

$ 36 991.70

Min: $ 36 571.34

Max: $ 39 996.00

1 064.76 BTC

$ 41.15 million

Buy

Coinbase

3.9

$ 36 969.12

Min: $ 36 487.02

Max: $ 40 035.17

715.38 BTC

$ 27.80 million

Buy

Binance

5.0

$ 36 994,27

Min: $ 36 510.64

Max: $ 40 019.77

75 295.74 BTC

$ 2.92 billion

Buy

Gateio

3.9

$ 36 982.78

Min: $ 36 596.34

Max: $ 40 025.41

7 758.30 BTC

$ 301.95 million

Buy

Exmo

4.3

$ 37 003.12

Min: $ 36 576.34

Max: $ 39 957.05

89.64 BTC

$ 3.51 million

Buy

Watch all exchanges

How to earn cryptocurrencies on a fall

Cyclicity caused the appearance of scenarios. Due to repeated events, traders already have ready-made instructions with possible options.

Purchase of assets at low cost

Cryptocurrencies are characterized by high volatility. It sometimes leads to various anomalies – for example, on one exchange the cost of an asset can fall by 80%, and then return to the previous value. This is possible due to a sharp surge in the activity of traders, deficiencies in software, etc.

Among large anomalies – a decrease in BTC cost by 90% on the Binance US exchange at the end of October 2021. The price of the first coin sank to $ 8200, but then quickly returned by $ 65,000. One of the users caught luck by the tail.

Bitcoin schedule on the Binance US exchange

The trading platform did not comment on such an anomaly. There are 2 main versions – technical problems and sale of a large amount of BTC in the market. It is almost impossible to predict such events, so you will not work to earn money on the short. Use another approach:

Choose trading pairs with high volatility – the higher the probability of breaking the support, the better.

The grid of orders is set-several applications are created below the current price with an interval of 5-10%.

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Buying derivatives

Most of the newcomers sell in the spot market. Because of this, they have the only available option-the purchase of an asset. Derivatives – financial agreements on the cost of cryptocurrency, which expand the capabilities of traders. They are divided into several types:

Derivativopism

Futures record for the purchase or sale of an asset in the future at the established cost. In cryptocurrency exchanges, unlimited futures are used – you can close positions at any time.

Forwardwatering contract for the purchase and sale. It looks like futures, but intended for OTC trading.

The options prescribes the right to buy an asset at the agreed value.

Swap futures, which consists of a contract for the purchase of a basic asset and its sale in the future.

CFDDIRIVATIVE on the difference in the value of the asset. If the price has fallen, the buyer pays losses, in case of growth, costs are laid down on the seller.

Many large exchanges offer to earn cryptocurrency to fall using derivatives. Contracts are available on Binance, Kraken, OKEX, Huobi and other sites.

Contracts of investment banks

In the scene of the film “Reducing” 2015, a couple of traders want to conclude a deal against the real estate market. The investment bank can create a contract for any asset, and the client can make a bet on a certain result.

Among large players for cryptocurrencies, Goldman Sachs has long been popular. The bank offers the same derivatives as cryptocurrency exchanges, but contracts are available only to professional investors.

At the end of 2017, Bitcoin futures appeared on the American exchange of CME. Some analysts are convinced that they became the main reason for the BTC fall. In December 2017, the first coin updated the historical maximum, approaching $ 20,000. Professional traders noticed the market outburst and began to delight massively, which led to a rapid fall.

The fall of bitcoin in 2018 was called “Cryptosim”

Buying shares, the cost of which depends on the price of BTC

The first cryptocurrency is a flagship. At the end of 2021, it is more than 40% of the capitalization of the entire market. The BTC course affects other coins. Attention deserves:

Ethereum.

Cardano.

SOLANA.

Polkadot.

Binance Coin and others.

Coins with lower capitalization have high growth potential. If they begin to pour as much investment in them as in Bitcoin, their price will increase significantly.

For risk diversification, capital is divided between several assets.

This article is included in the cryptocurrency school Crypto.ru

Continue training

Tips for playing

In the falling market, they earn with marginal trade. The exchange provides any asset under security, it is sold, and after the fall they buy it back to pay off the loan. The trader leaves the resulting difference as a profit.

Tips for playing to lower:

Market monitoring. Beginners do not recommend using the credit shoulder and derivatives. The point is not only the complexity of the tools, but also the lack of observation of the market. It is better for the trader to first conclude transactions on a spare exchange of cryptocurrencies until he learned to notice patterns.

Risk management. A trading participant should not allow the complete drain of capital, otherwise his game will end. Several ways will help to avoid this: transactions by 20-30% of total capital or Stop Loss-closing the position when drawing cryptocurrency.

Analysis. Indicators will tell about the fall – for example, sliding medium. Large losses are noticed using fundamental analysis. Large -scale events always affect the further movement of the price of bitcoin and other coins.

Fixing profit. Short positions are usually closed faster than longs. In the cryptocurrency market, a bearish trend can end at any time, after which the price will go up. Using Take Profit, it is better to set the amount of profit in advance and close the deal.

Should I buy cryptocurrency on a fall?

Certainly! This is a chance to buy coins cheap and make money on the rise

We need to weigh. Perhaps the coin will never increase in price

Not worth it. Buy cheaper assets stupid

View the results

Summary

In the conditions of the growing market, the play for lowering is considered risky. Most investors are easier to buy an asset with a growth prospect for 3-5 years than trying to earn money on fluctuations. Instead of shorts, they open the order for the purchase to choose coins at a low cost.

Frequently asked Questions

💵 Who can earn on the fall of cryptocurrencies on the exchange?

❓ What is the minimum position for futures?

❕ Why is cryptocurrency falling?

💰 How much do they earn on the fall?

⛔ derivatives are available for any asset?

Deputy Chief Editor

Vitaly Ishchenko

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