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Golden Observation丨The volatility of BTC is getting higher and higher.How to avoid trading risks?



Golden Finance Blockchain, May 8th From the long bear market in 2018-19 to the "Black Thursday" in 2020, and to the recent frequent fluctuations, the cryptocurrency industry has experienced setbacks and challenges time after time, but every time Can be reborn from the ashes, reaching new heights each time. But the question is, more and more crypto traders find that market volatility is increasing, so how to avoid such risks?

Just after the cryptocurrency exchange Coinbase successfully completed its listing on Nasdaq under the stock code COIN on April 14, the price of Bitcoin on that day was affected by the positive effects, and once approached 65,000 US dollars, a record high, and its market value even surpassed that of Facebook, etc. A number of world-renowned companies. However, what was unexpected was that two days later, White House Press Secretary Jen Psaki confirmed at a press conference that US President Biden agreed with US Treasury Secretary Yellen's views on regulating cryptocurrencies. Yellen called on lawmakers to "reduce" the use of cryptocurrencies at her nomination hearing in January this year, and said that there is a real need to study ways to reduce the use of cryptocurrencies and ensure that money laundering does not occur through these channels. Not only that, but there is also news that the Biden administration may introduce cryptocurrency-related legislation in the next few months, because authorities will not tolerate an industry with a market value of more than "trillion dollars" not being regulated Double the capital gains tax rate for wealthy individuals earning $1 million.

Golden Morning News | May 29 Overnight Important Updates: 21:00-7:00 Keywords: Blockchain + Real Estate Registration, Shelley Upgrade, Canaan Technology

1. Beijing will promote "blockchain + real estate registration".

2. The May contract of CME Bitcoin futures closed up 3.05%.

3. The Ethereum network fee exceeds 700,000 ETH.

4. Cardano founder: Shelley upgrade will be carried out next month.

5. The founder of Telegram donated 10 BTC to a Russian charity project.

6. Wang Jing, member of the National Committee of the Chinese People's Political Consultative Conference: Use blockchain to break down the barriers of "information islands".

7.BB: Rising institutional demand and global money printing are driving Bitcoin.

8. Canaan Technology will issue $12.4 million worth of stock in the employee benefit plan.

9. Bitcoin continued to rise, with a daily high of $9,549 and a low of $9,405.47. [2020/5/29]

Industry insiders have warned that the Biden administration's plan to raise capital gains taxes does not bode well for cryptocurrencies and could lead to a market crash. However, some analysts believe that the cryptocurrency market is still affected by policy risks to a certain extent. According to the taxation rules of the United States, if you choose to sell Bitcoin after holding Bitcoin for more than one year, you need to pay capital gains tax. If Biden chooses to increase it A move to 39.6% is sure to cause mood swings in the market. But in the long run, cryptocurrencies may not be affected too much, because this bull market is very different from the previous ones. Many buyers of cryptocurrencies, especially institutional investors, will not exit the market in the short term, and the U.S. There is also no single regulation that "kills" cryptocurrencies, so the market will continue to grow and succeed.

Countdown to BTC Halving | Golden Finance Mining Earnings Report: According to Jinse Finance, according to data from the OKEx mining pool, the next BTC halving date is expected to be May 15, 2020, and there are 42 days before today. The current block height of BTC is 623997, and the block height of the next halving will be 630000.

Today, the computing power of the entire network is about 104.33EH/s, and the difficulty of the entire network is about 13.91T. The next difficulty is predicted to be 12.68T (-8.87%). There are still 6 days left before the adjustment. Today’s BTC income: 0.00001808BTC/T/day. [2020/4/2]

As expected, just a week later, Bitcoin staged another sharp drop on April 23 (the "Black Thursday" of the lunar calendar), with the largest drop of more than $7,000 within a day, and the lowest price fell to the range of $47,000. However, as the market gradually calmed down, Bitcoin regained its position above $55,000 on April 28. It can be seen from this that Bitcoin is still highly sensitive to market factors and policy influences, and this sensitivity is naturally reflected in the "price".

Analysis| Golden Disk: The market is gradually moving towards a bullish trend: Analysis of the Golden Disk: BTC as the first weight, the amplitude is too large, which is not conducive to market development. Instead, as it is now, stabilize the price of BTC and give more to other targets The opportunity is more reasonable. Yesterday, after BTC rose strongly, funds began to flow in, and the top 25 tokens by market capitalization performed well overall. Only XRP, TRX, and BNB closed down, and the rest rose across the board, while some oversold targets even soared sharply. It shows that the confidence in doing more has increased, and the market is gradually moving towards a trend that is beneficial to the bulls, and short-term opportunities can be seized. Remind investors to view market fluctuations rationally and do a good job in risk control. (Log in to the Jinse Finance APP—Discovery to view exclusive reviews of more currencies)[2018/10/9]

How can traders avoid the high volatility risk of cryptocurrencies?

Although the Bitcoin market has recently been volatile due to policy risks, it has to be admitted that the fundamentals of the cryptocurrency market today have been further consolidated, and the market conditions are indeed different from before. This Black Thursday is likely to be the cryptocurrency market preparing for the next bigger rebound, and the possibility of breaking through $100,000 cannot be ruled out later. In addition, with the gradual increase of institutional investors including Tesla, Square, MicroStrategy, and South Korean gaming giant Nexon, the industry generally believes that the Bitcoin exchange-traded fund (BTC ETF) is expected to be approved by the US Securities and Exchange Commission within this year. approval.

Golden Quick Review | Charity and Responsibility: According to maltatoday, Binance has established a blockchain charity foundation. The charity also signed a memorandum of understanding with the Malta President's Trust on Wednesday, the report said. The blockchain industry builds a better social image, and blockchain companies build trustworthy brands, which is generally a good thing. At present, more and more companies are joining the charity army. Charity is a bridge. We are happy to see more companies fulfill their social responsibilities through charity, even though in this process, the charity of individual companies has its utilitarian color. Jackie Chan once confessed to the media: "I used to do 'fake charity'. At that time, I didn't really do charity, but for the sake of image and needs. From doing fake charity, image charity, and superficial charity, today charity has turned me into a A good person." However, we also hope that while engaging in charity, blockchain companies will not forget to base themselves on the fundamentals, do a good job in serving users, and play a good role in the industrial chain. For example, exchanges should better conduct investor risk education, increase investment in security, speed up the guarantee of stable operation, and screen excellent projects more reasonably; for example, project parties focus more on blockchain technology How to better combine scenarios to help the real economy, rather than being keen on market value management. An enterprise that focuses on the fundamentals, does a good job in market services, and fulfills its responsibilities to users is also charity. [2018/7/26]

However, for cryptocurrency traders and investors, in the face of continuous fluctuations of large magnitude, it is still necessary to take a "precautionary shot" in advance, and try to choose the most reliable trading strategy to reduce losses.

Jinse Finance live report on Johnson of Nuggets company: there are more challenges in the underlying technology, blockchain incentives are conducive to supervision and management: CEO Alastair Johnson said, "The underlying technology itself is a challenge. As the network scale grows, there will be more nodes and more information transmission between nodes, which will become more complex and difficult to manage. Enterprises To strengthen the supervision and management in this area, the normal operation of the network system can only be achieved if the management problems are properly handled. The blockchain technology itself has a good incentive mechanism, which is very beneficial for solving management problems.[2018/4/19 ]

In response to the current volatile market, some cryptocurrency exchanges have launched grid trading services. Grid trading is a relatively reliable trading strategy. This trading strategy divides funds into several equal parts in a planned way by setting a price range, and performs mechanical operations on investment targets. It can effectively reduce the cost of long-term investment, and continue to accumulate profits in a volatile market environment.

Not only that, but some top exchanges have introduced the concept of "AI robot" in the grid trading service. The service supports the use of AI to analyze the user's historical transaction situation, and then provide targeted parameter recommendation services for the user. Traders only need to select the trading pair and determine the amount of investment, and the rest of the operations can be completed by the robot. After the grid trading is enabled, the transaction funds will be automatically transferred from the currency account to the robot account, and the transaction funds will also be automatically transferred from the robot account back to the currency account after the transaction is completed. No handling fee is required for all transfers. Because the operation of the whole process is very intelligent and convenient, it is very popular among users.

In addition, some exchanges have launched contract grid trading robots. Choosing a contract grid trading robot will obtain additional capital costs and grid income compared with pure spot trading. Under the same circumstances, the income is high and the risk is small. Moreover, the launch of such services extends the coverage of grid trading from spot goods to derivatives. Once a trader chooses the contract grid trading robot, it means that there is no need to understand the complicated contract principle, and the transaction can be easily opened by simply entering the investment amount.

Generally speaking, the longer the market fluctuates, the better the effect of grid trading. Judging from the historical data of Bitcoin prices in 2021, the volatile market has lasted for nearly three months since the beginning of the year. From this perspective, this trading strategy may also be an option.

There is no doubt that grid trading is a means of resisting market volatility, but with the emergence of more and more encrypted derivatives and financial instruments, the encrypted market is becoming more and more mature, and other innovative financial instruments and financial derivatives It also helps to smooth out the high volatility of encrypted assets, such as contracts, options, leveraged tokens and so on.

Among them, leveraged tokens, as a new type of cryptocurrency derivatives, have their own leverage. Since its operations are basically the same as spot currency transactions, the transaction threshold and experience are more user-friendly. Compared with contract transactions, leveraged tokens can also amplify investors' returns. And it is worth mentioning that the price of leveraged tokens will not completely return to zero, so there is no risk of forced liquidation, which is very suitable for the vast majority of cryptocurrency investors, especially those who want to profit from market fluctuations but do not want to bear Investors who liquidate risk.

Face up to the unique attributes of cryptocurrency

Although the cryptocurrency market has picked up, this process will not happen overnight, and there will inevitably be several major corrections in the middle. It is also common for the correction rate to exceed 20% in the cryptocurrency market, so investors pay attention to currency prices while More attention should be paid to risks, and more wisdom is needed to choose the best trading strategy.

We must face up to the unique attributes of cryptocurrencies: high volatility and strong speculation. When we realize these "special attributes", we will find that it is particularly important to choose one or more trading strategies that suit us. There is no doubt that this emerging market has become more and more mature along the way, especially with the support of contracts, options, leveraged token derivatives and other tools, the quality of cryptocurrency transactions is constantly improving, and investors During the period, there are more and more trading strategies to choose from. Even if there is an unstable price trend in the short term, you can still minimize risks and maximize returns by relying on diversified trading strategies.

There may still be various tests waiting for traders in the future, and more and more people realize that in the history of intermittent catch-up, volatility cannot be avoided, but in the long run, investing in cryptocurrencies still pays off.

Part of this article comes from Yahoo Finance


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