On This Page
- Which Crypto to Buy Today for Short-term
- Key Takeaways
- What is Short-Term Crypto Trading?
- Short-Term Trading Strategies
- Criteria to Consider When Choosing the Best Cryptocurrencies for Short-Term Investment
- Best Cryptocurrency to Invest Today for Short-Term
- Risks Arising from Short-Term Investments
- Conclusion
- FAQ
Which Crypto to Buy Today for Short-term
In the world of finances and technologies, cryptocurrencies are gaining constant popularity. They proved to be the asset category with the fastest rate of growth over the last few years, providing investors with exceptional returns. The market is quite promising as both short-term and long-term investors profit from its special possibilities.
However, making profitable cryptocurrency investments takes time, specialized knowledge, analytical skills, and specific tools. The growing cryptocurrency market presents huge chances if you learn strategies, criteria, the right coins for short-term trades, probable risks, and how to avoid them.
The following article will be on understanding strategies and analysis, selecting which crypto to buy today for short-term trading, identifying potential dangers, and learning how to reduce them.
Read also: Which Crypto to Buy Today for the Long-term
Key Takeaways
- Short-term crypto trading offers high potential returns carrying risks
- Analyse various strategies like scalping, day trading, and swing trading before choosing one
- Volatility, liquidity, project fundamentals, and market sentiment as the main factors when selecting cryptocurrencies
- Suggested valuable crypto-currencies to consider for short trading
What is Short-Term Crypto Trading?
Cryptocurrency investment potentials are expanding due to the rapid growth of blockchain technologies. More than 2,000 new cryptocurrencies are created and exchanged daily due to the constantly increasing number of initial coin offers (ICOs), which has given huge profits to many investors in short-term trades.
Purchasing a cryptocurrency and holding it for a short period qualifies as a short-term crypto investment which usually takes from minutes to a couple of weeks. To achieve significant profits through this method, it must become a full-time commitment. This kind of trading is heavily swayed by social cues and market patterns and demands constant monitoring of the crypto market, news updates, and other variables affecting crypto asset prices.
In recent years, there has been a huge increase in cryptocurrency transaction volume, which can be explained by speculative gains in wealth or by the number of projects developed on decentralized platforms. At the moment, the entire market value of all cryptocurrencies is around USD 2.71 Trillion.
Short-Term Trading Strategies
It's important to stay up to date on the right techniques for short-term investments as different factors can result in unexpected price surges due to certain events. When employing a strategy with a tiny piece of their capital investors must understand the potential rewards and expectations. There are a couple of different strategies to make short-term investments in cryptocurrency:
- Scalping - This strategy includes purchasing and selling crypto in very short periods (from seconds up to 3 minutes) to capitalize on points (pips). The basic goal of scalp trading is to make quick profits by profiting from short-term volatility. Such profits usually go from 1% to 3% without serious analysis making quick judgments based on price movement.
- Intraday Trading - Intraday trading focuses on higher price movements with a 15-minute to 1-day time frame gaining from 5% to 15% profits. Due to the market's high volatility, day trading cryptocurrencies can be particularly effective. Catching a sudden rise in digital currency can enable a day trader to make hundreds of dollars every day. However, this requires a certain amount of skills and analysis rather than scalp trading. Experienced day traders stay up to date on market trends and quickly capitalise when they see a profitable opportunity.
- Swing trading - Swing trading strategy aims to capture profits in an asset's price movements over several days to weeks longer than Day and Scalp Tradings. The idea is to benefit from the "swings" or variations in asset prices.
Swing traders rely heavily on technical analysis to identify trading opportunities. They use price data, trends, levels of support and resistance, and a variety of technical indicators holding positions for several days to weeks, aiming to capture gains from medium-term price trends. This strategy involves buying and selling crypto assets at higher prices where the profits can go from 15% to even 100%. - Arbitrage trading - Arbitrage is a trading strategy that takes advantage of price differences for the same item across several markets or exchanges to benefit from them. Continually monitoring numerous marketplaces or exchanges for price gaps the traders seek cases in which the same asset is priced differently in multiple marketplaces.
To sum up:
Regarding cryptocurrency capitalization dynamics by the end of 2021, the overall market capitalization of coins and tokenized assets traded on exchanges was around $2.3 trillion. If we look at capitalization in detail:
- the largest volume falls on Bitcoin (approximately $0.9 trillion);
- further ETH (approximately $450 billion);
- leader of stablecoins – USDT ($78 billion).
It is worth noting that the stablecoin market has low volumes. However, it has recently demonstrated good dynamics and has increased rapidly in recent years. Over a few years, the entire market capitalization of significant stable coins increased from $4.9 billion to $143 billion.
However, anyone who is knowledgeable about cryptocurrencies understands that the situation can shift at any moment. Although the market is currently in a gloomy period, many see this as a good opportunity to purchase assets at a low price.
Criteria to Consider When Choosing the Best Cryptocurrencies for Short-Term Investment
Short-term investments provide profitable dividends if the trader has experience in investing and analyzing not only strategies but also the right criteria. The cryptocurrency they buy should meet their personal needs and consistently bring profit to the holder.
The selection conditions include the following criteria:
- Support and resistance levels
Support and resistance refer to specific price points on trading charts that indicate massive buying and selling activity. Support is the price level at which the price of an asset stops falling. Meanwhile, resistance is the point at which an asset's price no longer rises.
- High Volatility
The high volatility of cryptocurrencies is the variability of their value, which in one trading session can grow by 300% and then fall by 400%, or vice versa.
- High Liquidity
Liquidity in crypto refers to how easily an asset can be bought or sold at a stable price in a particular market. If you can sell or buy an asset at any time and in any quantity without affecting the market price, the market is considered liquid. The more the price changes from buying or selling assets, the less liquid the market is considered.
- Low spread
Spread is the difference between the asking and the bid price for a particular currency. It represents the cost of trading and can vary depending on market liquidity, trading volume, and exchange fees. A narrower spread indicates a more liquid market, while a wider spread suggests less liquidity and higher trading costs.
- Leverage and margin trading
Leverage and margin trading both involve borrowing funds from a broker or exchange to enhance the amount of trade. Leverage allows traders to boost their earnings, but it also raises the danger of loss. Margin trading involves using borrowed funds to enter greater positions than achievable with only the trader's funds.
After considering the most promising option investors should consider the store of value, as the investment should have scarce value and a low connection with other assets as its worth should not be easily reduced over time because of inflation. The choice is to take a position that can ensure profit not only at the moment but also in the future.
Best Cryptocurrency to Invest Today for Short-Term
According to an in-depth market analysis, the following cryptocurrencies are determined to be quite promising for short-term trading crypto investments.
Fasttoken (FTN)
Fasttoken (FTN) has been developed by Softconstruct, a company providing ready IT solutions, having 700 partners, and more than 1mln users across the world, where all payments are done through FTN guaranteeing its big growth potential and investments which talks about its low risk
It is broadly used in a variety of providers as a gaming token and can be traded on centralized exchanges. As of March 10, 2024, the live price of Fasttoken was $1.75 per (FTN / USD) with a current market cap of $531M and $18M trading volume in 24 hours.
FTN represents the native coin of Bahamut Blockchain which is a public layer 1 EVM-based blockchain solution with a unique algorithm known as PoSA. Here FTN plays a crucial role in enabling staking, block creation and validation mechanisms, and cross-chain operations which are very important for its high liquidity. The most popular exchange to invest in and trade Fasttoken is Fastex which has its ecosystem including Fastex wallet, FTNFT, Fastex-Verse, Akneye, Fastex Pay, and NFT marketplace.
Pixels (PIXEL)
Developed as an ERC20 token on the Ethereum blockchain, PIXEL Coin is the native coin of the Pixels game. As a price unit, PIXEL serves as an in-game special coin system that allows players to buy upgrades, in-game products, and character appearance tweaks.
PIXEL coins can be purchased on centralized cryptocurrency exchanges like Binance which is the most well-known platform for purchasing and selling. Here, PIXEL/USD is one of the most active pairs. With a $713M market capitalization and a trading volume of $737M as of March 10, Pixels has shown merely a $0,9 price. At that period Pixels' fully diluted value (FDV) was $3,065,895,381. With 5B PIXEL tokens available for circulation, this is a good statistical image of a perspective market capitalization.
Based on this indication, the token is ranked 143rd on CoinMarketcap. Over the previous 30 days, 13 out of 26 (or 50%) Pixel days were green, according to Coincodex. Some historical data indicate that investing in Pixels is profitable right now as they are quite fine rate cryptocurrencies to invest today for the short-term.
Dymension (DYM)
DYM was eagerly awaited within the cryptocurrency community. It’s a roll-up platform token that was released for users of the Ethereum, Solana, and Celestia blockchains and was given to them $390 million via airdrop according to a set of requirements.
The blockchain network Dymension (DYM) is well-known for its RollApps. A rollup is a type of layer two (L2) blockchain that functions independently of the main chain to lower transaction costs and boost efficiency.
The DYM Hub oversees the blockchain, which focuses on the play-to-earn gaming and decentralized finance (DeFi) industries. Using Data Availability Networks, the hub improves data processing and provides developers with a RollApp Development Kit. The DYM token serves as the foundation for both the network's operations and the user rewards program. It was first made available to the community through the Genesis Rolldrop and is a crucial component of Dymension's strategic expansion into the blockchain industry.
Does investing in Dymension promise a profit? DYM had 11 out of 30 (37%) green days in the past 30 days. The highest amount ever paid for DYM was $8.50, which was recorded on February 14, 2024; however, because of its extreme volatility, the current price is 30.02% less than the all-time high. With 1,000,000,000 DYM in total supply, the market capitalization was $1,04B, with a trading volume of $61,7M as of March 10, and $7.45 USD for 1 DYM.
Manta Network (MANTA)
Manta Network is a modular blockchain ecosystem for zero-knowledge applications, including Manta Atlantic and Manta Pacific. The Network creates a secure infrastructure for zero-knowledge user interactions. The main goal of the project is to provide developers with a better experience for optimizing applications using zero knowledge.
As of March 10th, the trading volume was observed for the MANTA/USD trading pair and reached $133,7M (92% of the total volume across all exchanges). During that period, the minimum price for Manta Network (MANTA) was fixed at $3.50 per 1 MANTA with a market cap of $892M.
Manta Network has successfully raised $60 million, with involvement from well-known campaigns such as Spartan, Polychain Capital, ParaFi, and Binance Labs.
Sui (SUI)
SUI coins are traded on centralized cryptocurrency exchanges and are considered to be one of the most popular volatile coins for buying and trading.
As of March 10, the Sui cryptocurrency was trading in the range of 1.63 dollars for 1 SUI with a market capitalization of $2B. The minimum Sui price of $0.3648 was recorded on Oct.19, 2023, 340.03% lower than the March price. Because of its high volatility, Sui's trading volume reached $427,5M which is quite good for short-term gains.
The token ranks 56th in the Coinmarketcap ranking for this indicator. With a fully diluted market cap of $18.66 billion tokens on the market.
It is clear that the project is off to a good start. Top investors and launchpads are quite conducive for SUI’s further development.
Toncoin (TON)
Toncoin(TON) is the native cryptocurrency of the TON (The Open Network) blockchain platform. Being a relatively new currency for investment TON is an innovative third-generation blockchain that was originally developed by the Durov brothers who are also Telegram app founders.
TON uses a hybrid consensus of Proof-of-Stake (PoS) and Byzantine Fault Tolerance (BFT), ensuring fast and secure transactions. Holders of this cryptocurrency can become validators participate in staking and receive various rewards.
According to CoinMarketCap, as of the first half of March 2024, TON ranks 12th in the ranking of cryptocurrencies with a market capitalization of $15 billion. Its circulating supply is 3.4 billion coins out of a maximum of 5.1 billion with a price of $2,8 and continues rising.
In 2021, it was worth $0.3906. Since then its increase in value has been +1002.86% which speaks loudly about its success.
Risks Arising from Short-Term Investments
Beginning traders who have recently started exploring digital currencies often have to face fraud and fake cryptos. Multiple currencies have different analytics styles and statistics and often require time which forces beginners and potential investors to get lost at this stage.
Projects may seem promising in all aspects - with a skillful team of developers and an excellent reputation. However, note that crypto developers may easily make a rug pull suddenly abandoning the project and selling or removing all of its liquidity stealing investors’ funds. The name comes from the phrase "to pull the rug out from under (someone)", meaning to suddenly lose support. Without sufficient liquidity, investors struggle to sell their tokens or are forced to sell them at low prices. This is due to the Automated Market Maker (AMM) pricing mechanism, which determines prices through the ratio of two coins in the liquidity pool. Accordingly, paying attention to the entrance costs is vital as if it is cheap, traders will most likely have to bear multiple losses shortly.
On the other hand, an unaffordable crypto coin price won’t guarantee total security either. Inexperienced investors may consider trusting their money to a private crypto trader or a fund, to gain profit in newly formed markets without volatility. These choices might be hazardous due to a lack of restrictions and a big potential for fraud.
Another problem is not having clear knowledge of strategies regarding digital currencies, since it is often viewed as a gamble. The investment is rather seen as a fun edge and adds some interest to the portfolios, which may luckily give a great return or loss.
To reduce risks, it is recommended to invest in several assets, carefully choosing the currency for trading and storing, and to ensure the security of the assets by using reliable wallets and authentication.
Conclusion
Choosing a cryptocurrency for short-term trading is a task that requires careful analysis and assessment of multiple factors. It is necessary to take into account factors such as the project's technological basis, developers’ team, market capitalization, liquidity, adoption in the real world, and growth prospects. It is also important to follow the latest news and trends in the digital currency field to be aware of changes affecting the market.
It is important to understand the right steps and make correct analysis as many successful traders are getting lost and end up having financial losses because of significant price fluctuations they didn’t pay attention to.
And finally, the decision to buy a specific cryptocurrency should be based on the investor’s research and risk assessment having maximum information. Remember that the cryptocurrency market is highly volatile, and only thorough analysis and a deep approach can help to get the answer for which crypto to buy today for short-term.
FAQ
What should I pay attention to while short-term trading?
Except for high volatility, there are important factors of liquidity, project appeal, support and resistance levels, low spread, fee rate, leverage, and margin trading. and response to market changes.
What should I do before engaging in short-term trading?
To be successful in short-term trading, you have to do detailed market analysis involving technical and fundamental approaches. Define your risk tolerance and implement thorough tactics. Additionally, stay up to date with market news and for better trading opportunities.
Which assets are suitable for short-term trading?
Volatile assets, that have notable price changes, offer greater trading chances for short-term traders.
Disclaimer: Includes third-party opinions. No financial advice.
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