Key Insights:
In Dollar Cost Averaging, investors keep investing the same money irrespective of market conditions.
Scalping allows investors to enter and exit volatile altcoins to make money quickly.
Swing trading takes benefit of changing altcoin trends like we saw in third week of Jan 2025.
In Arbitrage Trading, altcoins are brought from an exchange and sold on another.
News-based trading captures the momentum of rising or falling markets to make quick money.
On-Chain Analysis takes advantage of on-chain data to identify market trends in trade.
In Fibonacci Retracement, a trader looks for fibonacci ratios to enter an altcoin trade.
Breakout trading is a strategy where traders buy altcoins when they cross a certain threshold.
Sentiment trading is a unique qualitative trading method where trades are placed based on greed and fear in the market.
In algorithmic trading, a trader automates trading via a bot and gives it a set of rules and money to trade.
Dollar Cost Averaging, or DCA is a low-risk trading method where risk is spread by investing equal amounts over a period of time. This ensures that you do not buy the crypto during a fall or a bull trap.Equated investments over a period of time help you buy at an average price that is net lower than the markets.
A modified version of this method called buying the dip, was used by MicroStrategy to accumulate Bitcoin over multiple instances when the markets fell. As a result, the average purchase price of Bitcoin for MicroStrategy lies around $70,000, while BTC is in the $100k range.
Scalping is a fast-paced trading technique in which traders enter a crypto when it has high momentum and exit within a few minutes of entering the trade. Though their percentage gains are usually low, say 0.1% or 0.5%, they use a large amount of money or leverage trading to make high returns in dollar terms.
This type of trading technique works best in rapidly rising markets, like in November 2024 (after the US election results), and during rapidly falling markets, like in April 2022 (crypto winter).
Swing trading is a strategy in which traders enter the markets when altcoins' trends shift from bullish to bearish or vice versa. Trend shifts can be detected prior to the shift using indicators like RSI, Bollinger Bands, Golden Cross, and MACD.
Traders enter before a shift in crypto trends and place contrarian(against the market trend) bets. When the market trends shift, they quickly make a profit and exit before the price momentum cools down, which helps them make quick money.
In this type of trading, the price difference of a single asset across two or more different platforms, like a DEX and a CEX, helps traders earn money. A good example of this trading strategy was seen during the launch of DOGS crypto, where a trader bought it from a DEX and sold it on its CEX launch a few hours later.
This type of trade is the least risky because even if the CEX lists the token at a lower price, there is a very low chance that the listing will happen more than 10% below your DEX price. Once listed, traders will get enough time to sell.
This type of trading is rather simple. All a trader needs to do is wait for certain news flows, such as approvals, partnerships, and announcements, for a certain altcoin and then trade long or short, depending on whether the news is positive or negative.
For example, if you are trading XRP, the news of Ripple executives meeting Donald Trump could help you initiate and make money in a bullish trade.
Similarly, for the same crypto, i.e., XRP, the charge of violating security laws (in 2020) acted as a bad news and in such scenario, a short trader could make decent money.
On-Chain analysis leverages data from blockchain explorers like Arkham Intelligence, Santiment, Glassnode and several other tools to understand the real accumulation and distribution that is going on in the market. This type of trading also helps users track big entities like whales which helps them stay on the safer side of the market and pre-empt large movements before they happen.
Below is a sample insight from Santiment that is typically used to accumate crypto before it rises. The price of XRP rose five days after the insight was discovered, and by the end of the same week, XRP rose by 36%.
In our experience, on-chain analysis is the most accurate trading analysis technique. However, sometimes traders fall for false trends or misread signals.
In Fibonacci-based trading, the Fibonacci indicator is used to identify support and resistance levels. When the price of crypto reverses (after falling or rising) and reverses a certain percentage, a Fibonacci retracement is said to have occurred.
The retracement percentages 23.6%, 38.2%, 50%, 61.8%, 78.6%, 100%, and 161.8% are the seven fibonaci retracement numbers.
A 61.8% retracement is called a Golden Retracement and has the highest chances of a full recovery plus a further rally. Traders enter here to make money. Below is one such Fibonacci Retracement that indicates a super rally in Altcoin Markets and also shows the high possibility of an Altcoin Season in 2025.
In breakout trading, the cryptocurrency is observed for a certain period, and then price behavior and support and resistance levels are identified. The next time the price crosses a certain level, says resistance, its previous price action estimates the extent of the current breakout. This helps traders earn in a much safer way as the levels are already well known to them.
This type of trading works best in a recovery market where most cryptocurrencies are recovering their past price levels. For example, in the first week of January 2025, Bitcoin recovered from $90.5k to $99k and gave a clear breakout above $92k.
Bitcoin with its Support and Resistance Levels
Tradingview
Sentiment-based trading analyzes the sentiments prevailing in the markets and trades accordingly. The stronger the sentiment, the easier it becomes to trade.
For example, when the markets are in extreme greed, say above 75, there is a possibility to go long in large-cap cryptos like Bitcoin, Solana, or XRP.
Here, the crypto fear and greed index plays a critical role in shaping the trade. The levels of the index show the bias of the markets and help traders enter and exit trades with confidence or caution.
Crypto Fear and Greed Index
CoinMarketCap
For example, if the markets are extremely greedy, it would mean a bullish trade is least likely to go wrong. Similarly, for a neutral market, the price could move in either direction, whether bullish or bearish.
Another popular index used to gauge sentiments in the Altcoin Markets is the Altcoin Season Index that shows the relative strength of altcoins relative to Bitcoin.
Altcoin Season Index
CoinMarketCap
In algorithmic trading, the trader builds certain rules, which then guide software or a bot, and the trade is automated for a certain period, say one hour or one day.
A typical example of an Algo trade rule looks like this:
Trade between $5 and $6.
Enter the trade if RSI breaks above 70.
Exit the trade if the price falls 1% from the local top.
Book 50% profits if the price reaches this level.
A drawback of this kind of trade is that it needs several tweaks before the setup is ready for the real world. Also, in a real world setup, no matter how complex your algorithm is, there is a very high chance of your trade going wrong.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.