Cryptocurrency has continued to gain popularity over the decade globally. Since the breakout and massive price increase of Bitcoin, many organizations, brands, individuals and even countries have developed an interest. Since then, many digital coins have emerged and grown popular and have also been accepted as a mode of payment in some areas.
Cryptocurrencies are digital currencies in form of coins. Crypto trading system operates using the peer-to-peer technology and are created using the blockchain network for maximum security. These currencies are different from the fiat currencies created and issued by the government. The difference between these two currencies is that the cryptocurrency is not tangible. Rather, they comprise data and bytes.
Cryptocurrency does not have a regulating body that oversees its circulation in the economy. Unlike the central bank of a country that has the power to regulate and monitor the flow of fiat currencies, cryptocurrency relies on the peer-to-peer technology that makes use of cryptography and charts.
Although it is not recognized as a legal tender, crypto has had a significant impact on the global economy. Crypto has shown the great potential of turning around the financial landscape of the global economy and this makes it very useful and difficult to overlook. The blockchain technology which constitutes the foundation of crypto has paved way for new investments and the crypto trader have utilized this opportunity to make profits.
Crypto trading is the act of placing a trade in a position toward the price direction of a digital currency against the US dollar or against another crypto coin. This implies that a coin is paired against the dollar or against cryptocurrency depending on the popular demand at the moment. An example of a crypto pair is the BTC/USD. This pair means that the Bitcoin is being traded against the US dollar and traded in the crypto network.
Just as forex or stock are traded using the Over-the-counter method, cryptocurrencies can be traded using the Contract for difference(CFD) method. This trading style gives room for great flexibility, allows the trader to have leverage and also gives room for the trader to take long positions as well as short positions.
Blockchain networks are irreversible, distributed accounts that help in managing assets and recording transactions freely. It is a technical structure that allows applications to gain access to smart contract services. Smart contract service is basically a network that initiates transactions and is distributed to each peer node and subsequently records the transaction on their copy of the ledger.
The transactions carried out which include the orders placed, the payment methods and the account of the end user can be tracked using the blockchain network. The blockchain network depends on a decentralized network of end users to approve and document the transactions carried out.
The blockchain network is unique because of its fast mode of delivering transactions straight to the receiver, thereby obsoleting the need for one or two intermediaries. The blockchain network is very consistent and has a 24-hour, seven days a week service delivery. It is a secured network and has stood out as a preferred choice by traders.
There are hundreds of cryptocurrencies that are currently available globally. We will be looking at a few of these cryptocurrencies. They include;
Having understood what cryptocurrency is and the various types of cryptocurrency, it is important to know the strategy you can utilize when trading crypto. Some of these strategies include;
The resistance level is a point at which the price of a coin might rise to. The resistance price is always above the current price of that particular crypto coin. The support level on the other hand refers to the level below which a coin’s price is not supposed to fall, hence it is always lower than the current price of that particular coin.
With these strategies in mind, you can make an informed decision and choose a strategy style that suits you. Remember to always do your personal research on a project before you invest your capital.
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