The crypto market has had a good year, recouping some losses incurred in 2022 during the last crypto winter. While Bitcoin (BTC) broke through the $31,000 mark on June 23 to update the year-to-date high (YTD), the largest cryptocurrency by market capitalization still has a long way to go. travel before surpassing its record set at the end of 2021.
Following the impressive rally that pushed the price of Bitcoin close to $70,000 in November 2021, the market has been in freefall for months. The valuation of the first cryptocurrency continued to decline until the end of 2022, falling below $16,000 last November.
The bearish pressure was fueled by significant crashes in the crypto space, including LUNA, Three Arrows, Celsius, and FTX.
A multi-month downtrend can be difficult for crypto investors, who are mostly hoping for a long-term rise given Bitcoin's deflationary pattern. A long-term price decline can be frustrating even for hodlers, who may feel pressure to cash in at some point to avoid losses.
The good news is that Bitcoin and major altcoins have rallied this year, and the end of June was particularly bountiful, with the market expecting the first Bitcoin exchange-traded funds (ETFs) to be approved soon. However, even if there was no light at the end of the tunnel, crypto traders should not despair. Digital assets are volatile and the market always offers opportunities.
The best way to take advantage of a downtrend is to open short positions and take advantage of falling prices. Unlike stock traders, who must take extra steps to short company shares, crypto traders can go long or short with equal ease.
Crypto traders may be interested in shorting Bitcoin or an altcoin when they expect the price to decline for a period of time. They must base their decision on reliable market analysis. To make the most of a downtrend, it is advisable to open a short position when the market reaches an overbought state or breaks below a support level. Additionally, going short makes sense when the price action repeatedly fails to break a resistance level and begins to move away from it.
Automating short trading can increase efficiency
While opening short positions can be done manually on crypto exchanges and derivatives trading platforms, traders can automate their strategies using special bots. For example, TradeSanta offers several algorithmic strategies and trading robots that can perform most trades without human intervention. This eliminates the risk of psychological pressure, saves time and increases trading efficiency.
The advantage of TradeSanta is that, apart from its ready-to-use algorithmic strategies, it allows users to create bots from scratch and customize trading strategies. For example, users can create bots that automatically open short positions at predetermined price levels. Bots can also include risk management parameters, such as single or trailing stop losses, single or trailing profit triggers, and TradingView stop signals.
TradeSanta's account can be directly connected to a user's preferred crypto exchange via API keys. This way, if a user has an account with Binance, Coinbase, OKX, Kraken, Bybit, or any other major exchange compatible with TradeSanta's API keys, they can deploy the bots without moving their funds from the exchange. For added convenience, TradeSanta also offers its proprietary, free and intuitive trading terminal. Traders can manage all of their open positions and portfolios from one place.
With TradeSanta's algorithmic trading, crypto holders can easily take advantage of bear markets. The platform supports over 3,500 exchange-listed coins and regularly updates them once they appear on the exchange, so the short strategy works with any of these coins. For example, if a trader expects Bitcoin to continue its downward trend, he can open a short position on the USDT/BTC pair by deploying the bot. It will automatically buy USDT and set a profit order based on the percentage specified by the trader, taking into account the fees. The bot will wait for the Bitcoin price to reach the pre-determined target and then buy it back at the lowest price. This way, the trader ends up with the same amount of BTC while earning a profit in USDT.
Experienced traders can also take advantage of TradeSanta's technical analysis tools to better understand price action, identify small and larger trends, determine support and resistance levels, and interpret market sentiment. Finally, users can better manage their funds with TradeSanta's Crypto Profit Calculator.
Apart from short and long strategies, TradeSanta users can take advantage of a community of active traders on its Telegram, where they can get help anytime, get regular market updates, and share their tactics and trading tips.
With TradeSanta, opening short positions is simple and secure. While the execution of short strategies is automated, traders can customize the entire process and set specific parameters to better control their portfolios. By taking advantage of tested trading robots, crypto investors can seek profits regardless of the market trend.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim to provide you with all important information we may obtain in this sponsored article, readers should do their own research before taking any company-related actions and take full responsibility for their decisions, and this article can also not be considered investment advice. .