After being in an uptrend for eight months, volatility in the crypto markets is heating back up.

In less than two weeks the value of cryptos fell 50%, shaving off $1.2 trillion in market cap.

bloomberg galaxy crypto index

(Source: Bloomberg.)

This sudden drop may be frustrating for some investors. But if you have a trading mindset, these periods of volatility provide the best opportunities to make gains.

That’s because the crypto market will likely seesaw over the coming months as it makes its way back toward its previous high.

During this time, traders will have plenty of chances to follow the “buy low, sell high” mantra.

We’ve Been Through This Before

The volatility that we’re witnessing now in the crypto markets isn’t uncommon.

Drops of 20% or more should be expected every three to six months. At least, that’s what we’ve witnessed historically.

Since 2017, cryptos have been through seven major volatility spikes.

And even when the crypto markets have been relatively calm, they’ve still had much more dramatic shifts than U.S. stocks (represented by the Russell 3000 Index in the chart below).

bloomberg galaxy crypto index vs. russell 3000

(Source: Bloomberg.)

This makes crypto the best trade for active investors, as there are more opportunities to make gains from buying and selling.

There’s a Better Way to Trade Crypto

Pinpointing the ideal time to buy and sell can be challenging for even the most seasoned traders.

Seemingly small aspects of life such as not getting enough sleep the night before or what you ate for breakfast can derail your trading strategy.

That’s why many successful traders use algorithms that determine entry and exit signals.

Algorithms eliminate many of the problematic human aspects of trading and are a valuable tool to add to your arsenal.

But let’s face it: Not everyone is a computer scientist or mathematician that can craft a trading algorithm from scratch.

Traders who want access to a tool that determines buy and sell signals for them will want to check out our special rebroadcast of The 4X Stock Accelerator Summit later this week.

In this presentation, Ian King and TradeSmith CEO Keith Kaplan explain how to maximize your profits while staying ahead of the market’s roller-coaster ride.

And this trading system works for everything, from stocks and mutual funds to exchange-traded funds and commodities — and even cryptocurrencies.

We’ll have more information for you in Wednesday’s edition of Smart Profits Daily.


Steve Fernandez

Research Analyst, Strategic Fortunes