All You Need to Know About Shorting Bitcoin
The Bitcoin market is very volatile. The volatility comes from the price fluctuations that allow traders to buy and sell bitcoins to make a successful trade. This can be done in one of two ways. You can either go long or go short.
Bitcoin shorting is different from going long when one is opening a position. Going long is buying low and hoping for a price increase so you can sell and make returns. Shorting bitcoins is the opposite of this kind of trade. Which poses the question of can you short bitcoins? Which most novice traders would not consider as a mode of trading bitcoin.
How Does Shorting Bitcoin Work?
Most traders purchase bitcoins while betting that the price will rise so they can sell at a higher price. For traders shorting bitcoins, they trade by betting that bitcoin prices will fall. In shorting bitcoin, the trader borrows bitcoins and sells them at the prevailing market price and then waits for the prices to fall so they can buy and replace the coins they had borrowed. Therefore, shorting is selling at high and buying at low.
When’s the Right Time to Short Sell?
By hedging against the risk of a downward movement in prices, a trader must appreciate that the bitcoin market is speculative and consider the market trends and external factors.
The bitcoin market is massively affected by external factors. These factors include politics and regulations; therefore, one must analyze these factors and understand their impact on the market.
Of course, there is a technical analysis that explains the trend of the market. You should short sell only after you have analyzed these tools and the external factors and established that the market is going to take a plunge.
It is important that you move fast because the market is highly volatile, and things could change in a matter of hours because of things like negative news.
Can You Short Bitcoin under CFDs?
CFDs help you trade without owning the asset itself. CFDs stands for Contract for Difference. With CFDs, you can still bet on the price increase and decrease of assets such as bitcoins. Bitcoin traders can go short with their trading and use margins to make successful trades. Therefore, it is possible to short bitcoins with CFDs.
Shorting other Cryptocurrencies
Bitcoins are not the only currency that can be traded by shorting. Shorting as a mode of trading can be used across the market and, particularly, the trading of other cryptocurrencies. However, this depends on whether the platform that you use allows shorting in trading.
Shorting Bitcoin on PrimeXBT
With technology, there has been an increase in the number of platforms that can be used for trading online. This includes trading in cryptocurrency. PrimeXBT is one of the popular platforms that can be used for trading cryptocurrency. However, not all platforms allow for shorting bitcoins. Luckily, PrimeXBT allows you to short trade in bitcoins.
Getting Started to Short Bitcoin on PrimeXBT
With the globalization of trading, PrimeXBT checks all the boxes necessary for a platform to meet the needs of novice and experienced traders. PrimeXBT has been redefined to offer faster and seamless mobile browsing functions.
The registration process is easier to follow, and new users are guided through the process. PrimeXBT has the current authentication process that includes Face ID, Touch ID, and others.
The trading process is already complex, with one having to analyze financial and market trends before trading. This demands technical expertise. As a result, PrimeXBT has adopted simplicity in the navigation of the app with simple back and forth swipes between tabs, easier and conspicuous sections, and a satisfying touch.
If you were wondering how you can short bitcoins, then PirmeXBT has got you covered, including where you can short bitcoin.
Download the application today and begin your journey toward making successful trading choices when shorting bitcoin.
