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9 Day Trading Cryptocurrency Strategies You Need To Know

Here are 9 of the best day trading crypto strategy types you can try and test
Below we cover options to choose the best cryptocurrency trading strategy for, the best cryptos to trade and how to choose them as well as a simple guide for getting started trading crypto.

In this post I want to give you options for the best day trading crypto strategy for you. There are a ton of ways to day trade crypto and to become profitable. But what it comes down to is choosing a day trading crypto strategy that suits you, your style of trading, available time and other factors.

So really I can say that there is no best day trading crypto strategy that fits every trader and will make them profitable. Instead we will give you options to choose from so that you can find a crypto trading strategy that suits your personal style and also look at at considerations such as the best crypto wallet app to us.

And I would also like to add that no matter what strategy you choose, or what asset i.e crypto or stocks, becoming a successful trader must begin with knowledge in the fundamentals of day trading principles and market movements. And with this foundation, you can succeed in day trading no matter what the asset or strategy.

Let’s get into different crypto trading strategies and the basics of selecting good cryptos to trade as well as how to start trading crypto.

Choosing the Best Day Trading Crypto Strategy

At its peak, back in November 2021, one bitcoin was worth a staggering $68,000.

It’s no secret that many investors have made a fortune with bitcoin and other cryptocurrencies. There’s no telling what the future holds, but it certainly looks bright for crypto.

If you’re looking to get into cryptocurrency trading, this could be the perfect opportunity to hop on the crypto bandwagon. However, it’s worth noting that crypto trading is no walk in the park. Without proper day trading cryptocurrency strategies, making a killing from crypto trading is a pipe dream.

If you’re looking for solid crypto trading strategies for your investments, you’re in the right place. Today, we’ll be highlighting a few foolproof cryptocurrency day trading strategies to boost your investment.

Related Read: Best Price Action Patterns in Day Trading

What Is Crypto Day Trading?

Before we proceed, let’s first solidify our understanding of what crypto day trading is. So what is crypto day trading?

Day trading with cryptocurrencies is a form of short-term cryptocurrency trading in which transactions are completed on the same day. Crypto day trading involves actively buying and selling digital assets like Bitcoin, Ethereum, and other altcoins on cryptocurrency exchanges.

This means traders buy and sell their crypto in a 24-hour time frame. It’s one of the simplest crypto trading techniques, but it can be very profitable, if you do it the right way with good research, proper planning and risk management and possible using the strategies that are discussed below.

Why Trade Crypto?

The significance of day trading in the cryptocurrency market lies in the market’s high volatility and liquidity. Cryptocurrencies are known for their price volatility, which can create opportunities for traders to capitalize on price movements within short time frames. 

Additionally, the 24/7 nature of cryptocurrency trading, unlike traditional stock markets, allows day traders to take advantage of price movements at any time of the day or night.

The significance of day trading in the cryptocurrency market lies in the market's high volatility and liquidity.
The significance of day trading in the cryptocurrency market lies in the market’s high volatility and liquidity.

Related Read: Harmonic Patterns in Day Trading

What Cryptos to Trade

So what are the best cryptos to trade and how to select them? Here are some key factors to consider when selecting cryptos to day trade. And further down below are examples of popular cryptocurrencies suitable for day trading.

Select the Best Cryptos to Trade: What to Look for

Look for cryptos with high liquidity

Liquidity refers to the ease with which a cryptocurrency can be bought or sold without significantly impacting its price. High liquidity ensures that traders can enter and exit positions quickly with minimal slippage (the difference between the expected price and the actual execution price).

Popular cryptocurrencies with high liquidity are typically traded on major exchanges and have a large number of active traders.

Look for cryptos with higher volatility

Volatility measures the price fluctuations of a cryptocurrency over time. For day traders, volatility is essential as it provides trading opportunities to profit from price swings.

However, high volatility also increases risk, so traders should assess their risk tolerance before trading highly volatile cryptocurrencies.

Look for cryptos with a higher Market Cap

Market capitalization reflects the total value of a cryptocurrency circulating supply. It is calculated by multiplying the current price by the circulating supply of coins or tokens.

Cryptocurrencies with a higher market cap often have more stability and liquidity compared to smaller-cap coins. However, smaller-cap coins can also provide significant price movements and trading opportunities for experienced day traders willing to accept higher risk.

Look for Cryptos with high Trading Volume

Trading volume indicates the number of trades executed within a specific period. Higher trading volume typically means better liquidity and tighter spreads, making it easier for traders to execute trades at desired prices.

Cryptocurrencies with consistently high trading volume are preferred by day traders due to increased liquidity and reduced slippage.

Popular cryptocurrencies suitable for day trading

1.Bitcoin (BTC)

As the first and most well-known cryptocurrency, Bitcoin offers high liquidity, significant trading volume, and relatively stable price movements compared to some altcoins. It is often considered a benchmark for the broader cryptocurrency market.

2.Ethereum (ETH)

Ethereum is the second-largest cryptocurrency by market cap and is widely traded on various exchanges. Its native token, Ether (ETH), is known for its liquidity and is a popular choice for day traders looking to capitalize on price fluctuations.

day trading cryptocurrency strategy - 9 options to choose from
ETH is known for its liquidity and is a popular choice for day traders looking to capitalize on price fluctuations.

3.Binance Coin (BNB)

Binance Coin is the native cryptocurrency of the Binance exchange, one of the largest cryptocurrency exchanges globally. BNB has seen increased adoption and trading activity, making it suitable for day trading due to its liquidity and trading volume.

Other Altcoins

Several top altcoins like Cardano, Solana, and others offer liquidity and volatility suitable for day trading. These coins often experience significant price movements which are driven by market developments and project news.

Best Day Trading Cryptocurrency Techniques

Having the right cryptocurrency trading strategies is imperative to your success as a crypto trader. That said, here are five of the best strategies you could try out as a crypto trader.

1. Range Trading

Range trading is based on the assumption that cryptocurrency prices fall within a certain range. This strategy involves examining candlesticks with keen attention to support and resistance levels.

Traders who use the trading range buy or sell crypto based on these two levels. They’ll buy when the crypto hits a specific support level and sell when it reaches a particular resistance level. This ensures clear trading parameters and is one of the most straightforward day trading strategies.

The disadvantage of range trading is that it necessitates traders to be on the lookout for new opportunities and frequently put money into the market. This means traders have to pay a bundle in commission fees every time they invest.

2. Technical Analysis

Technical analysis, or TA, is an intricate trading strategy for day trading. This strategy is premised on mathematical figures and indicators that traders use to draw conclusive conclusions on the market’s movements. Most traders use computers to monitor these mathematical indicators and see through their trades.

Some traders, on the other hand, keep a close watch on the charts, using the cup-and-handle pattern technique, for instance. The Relative Strength Indicator, or RSI, is one excellent example of a mathematical indicator popular in technical analysis. This indicates how much a cryptocurrency sells and reflects on whether the crypto price will rise or fall.

3. Scalping

Scalping involves taking advantage of minor price movements within a short period. Traders who use the scalping strategy are known as scalpers.

Scalpers take advantage of leverage like margins or future gains to boost profits. This works fine, but it increases their losses if things don’t go their way. That’s why risk management is imperative to successful scalping in crypto day trading.

Scalping involves the use of other day-trading techniques, including order book analysis and volume heatmaps. Some scalpers also use technical analysis to determine their entry and exit points.

4. Bot Trading

Bot trading is also known as high-frequency trading or HFC. This type of trading involves using special software known as a “bot” that executes commands automatically. Bots use complex algorithms and can execute multiple trades in quick succession.

However, contrary to popular belief, bot trading doesn’t mean traders can sit back and let the bots do the trading. Traders will have to create a specific strategy and develop a program that can execute that strategy. They also have to constantly monitor and update the bots to ensure they achieve their intended purpose.

5. Long Straddle Trading

Trading long straddle training is also known as buy straddle or simply straddle trading. With straddle trading, traders buy a put and a call order on the same crypto. Both the put and call orders have the same expiration date and striking price.

This strategy takes advantage of a cryptocurrency’s volatility. As long as the crypto price changes, the trader makes a profit. This means the trader wins regardless of whether the crypto price goes up or down.

However, if the crypto asset price doesn’t change, the crypto trader will lose. Plus, since traders purchase both call and put orders, they incur double losses if the asset price remains the same.

risk management is a key part of any day trading crypto strategy
Whether trading crypto or any other asset, risk management is a key component of any day trading crypto strategy .

6. Sentiment and News Analysis

As the name implies, sentiment and news analysis involve looking at news headlines and the overall market feel to determine your trading. This strategy is less popular with most day traders because most news headlines affect the long term. However, it’s still worth a shot, especially if you’re starting.

With news analysis, currency news on cryptocurrency will determine whether you should hold, buy, or sell cryptocurrency. For instance, in 2021, when Turkey banned cryptocurrency, most crypto owners decided to sell their crypto. This led to a drop in crypto prices.

News and sentiment analysis are all about keeping a close eye on what’s going on in the crypto world. Positive news means that things are looking up for crypto, and it will fetch a higher value. Negative news means that crypto prices are likely to fall.

7. Breakout Trading

Breakout trading involves entering positions when the price of a cryptocurrency breaks through key support or resistance levels. Breakouts often occur after a period of consolidation or when there is a surge in trading volume, indicating a potential shift in market sentiment.

Traders using breakout strategies wait for confirmation of a breakout through technical indicators or price action patterns. They may set buy or sell orders above or below the breakout point to enter trades as the price continues its momentum in the breakout direction.

8. Reversal Trading

Reversal trading focuses on identifying market reversals and trading against the prevailing trend. This strategy is based on the belief that markets often experience temporary corrections or reversals after extended price movements.

Reversal traders use technical analysis tools such as candlestick patterns, divergence indicators (e.g., RSI divergence), and support/resistance levels to spot potential reversal points. They aim to enter positions early in the reversal phase, anticipating a counter-trend move for profit.

9. Momentum Trading

Momentum trading is based on the concept of following strong price trends fueled by volume and market momentum. Momentum traders look for cryptocurrencies that are experiencing significant price movements in a particular direction.

Traders using momentum strategies may employ technical indicators like MACD (Moving Average Convergence Divergence), trendlines, and volume analysis to confirm the strength of a trend. They typically enter positions in the direction of the prevailing momentum, aiming to ride the trend for a portion of its duration.


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How to Day Trade Crypto Correctly

The above strategies should set your crypto day trading on the right foot.

My first suggestion would be to simplify your day trading in terms of technical analysis and indicators and overall strategy in order to become a consistent and in time profitable crypto trader.

Especially with the number of trading strategies out there, it’s best to keep things as simple as possible especially if you are just starting out in crypto trading.

That’s all well and good, but what if you’re an absolute beginner in crypto day trading?

If this sounds like you, keep reading, and we’ll show you how to do crypto day trading the right way.

1.Start By Choosing a Reputable Platform

The first step to day trading cryptocurrency is choosing a good crypto trading platform. There are tons of crypto-trading platforms, but you have to settle for the right one. In the US, you can only use crypto-trading platforms that the domestic authorities regulate.

When looking for a crypto-trading platform, here are a few key factors to consider:

Supported Cryptocurrencies

You need to find a trading platform that supports the crypto you’re looking to trade. Of course, you first have to figure out what cryptocurrencies you want to trade. You can start with some of the bigger names before moving to the newer cryptocurrencies.

Reviews and Testimonials

Reviews are users’ accounts of their experience with the trading platform. Ensure you have a look at reviews to know what to expect from the trading platform. Positive reviews are a good sign, but negative reviews are a red flag you shouldn’t ignore.

Check the Number of Active Years 

The number of years the platform has been active is also an important factor to consider when picking a trading platform. The more years of activity, the more stable and credible a trading platform is. You might want to tread softly with new trading platforms that are yet to make a name for themselves in the industry.

Transaction Fees

Crypto trading platforms charge transaction fees for all transactions you make on the platform. That’s perfectly okay, but you want to be careful with platforms that charge too much to transact. The transaction fees should be within reasonable margins to be worth considering.

Deposit Methods

It’s important to look at what kind of deposit methods the trading platform allows. Some will let you wire funds to your cryptocurrency wallet, and others will allow bank transfers. Find a platform with deposit methods that are easy and convenient.

2.Pick Your Investment

Once you find a crypto trading platform that fits your fancy, the next step is to choose your crypto investments. Thousands of cryptocurrencies exist today, but most trading platforms only handle a handful of them.

For crypto day traders, market volatility is both friend and foe. The chaos of high volatility is what engenders the actual buying and selling of crypto. So, find a highly volatile crypto that you think will work for you.

It’s important to do tons of research on a cryptocurrency before investing in one. Look at things like volatility, trading volume, and liquidity before picking a crypto to invest in. Find a forum that discusses crypto and other assets like http://www.raremetalblog.com/oxford-gold-group/ so you can learn all you need to.

3.Select a Day Trading Strategy

Pick a crypto day trading strategy from the ones we’ve talked about above. Ensure you pick one that you’re familiar with and understand completely. Liaise with other day traders on the best strategy to pick for your trading.

4.Start Day Trading Crypto

After selecting a solid strategy, all that’s left for you is to start trading crypto. If you play your cards right, you’ll be able to rake in some good money every day.

Best Day Trading Cryptocurrency Strategies for Successful Trading

Even though day trading cryptocurrency is one of the most profitable day trading strategies, it can still be tough. That’s why traders need the best day trading tips so they can minimize risks and maximize gains.

By following the day trading cryptocurrency strategies we’ve talked about above, you can boost your profits and avoid most mistakes.

For more tips and strategies, keep reading our articles.