Published on July 24th, 2021 | by Sunit Nandi0
How To Trade Ethereum And Altcoins On PrimeXBT In 2021
To start 2021 Ethereum had yet to break above its former all-time high from 2018, but before long into the year, it has reached a price more than three times the former high. Ethereum had done the unthinkable and set a new record peak at more than $4,400 on most exchanges and trading platforms. Ethereum then promptly dropped all the way to $1,680 at the current low.
The plunge and extreme volatility of a move of this magnitude from under $1,000 to $4,000 then back to $2,000 was a rollercoaster most investors and HODLers couldn’t take. So many were shaken out, while the rest realized that it is better to trade Ethereum and speculate instead, rather than holding a highly volatile asset for the long term. And if you must hold ETH, there’s also a way how to use it to trade while holding it at the same time.
Here’s all the ways how to trade ETH on PrimeXBT, explained with an in-depth guide.
Why Did Ethereum Explode To Start 2021?
Ethereum had its best year yet to start, so there should be no real reason for shock that it increased in value by more than 4x in the same amount of months. With no resistance above it after breaking above its former 2018 high, that alone caused the second ranked cryptocurrency to soar. However, Ethereum, as the most important altcoin in the entire industry – of which most other altcoins are built on as ERC-20 tokens – grew for so many more.
As the backbone blockchain for most other crypto assets out there, demand for ETH exploded due to users transacting across DeFi, minting NFTs, and all the other things that go along with an active crypto economy with thriving adoption. ETH gas fees also soared, which caused the network to slow down, however, it also caused demand for ETH to spiral out of control.
DeFi allows for permissionless access to lending and borrowing services through Dapps which run on the Ethereum supercomputer as smart contracts. NFTs, which are non fungible tokens and often art or music, are also stored on Ethereum as a smart contract. Not only the demand for ETH related to this but Wall Street catching on that Ethereum was the most currency-like crypto of all caused interest to pour in.
What Did Ethereum Crash In 2021?
A rising tide lifts all boats, and when Bitcoin was rising, all other cryptocurrencies were doing great also. When Bitcoin collapsed, altcoins like Ethereum stayed bullish for an extra week or two, but eventually crashed just as bad if not even worse than Bitcoin did. Ethereum had risen by more than 4x in just four months, making it some of the fastest gains ever recorded in crypto. Everyone had been expecting even higher prices, and the market needed a cool off phase and correction,
Many market participants were shaken out in the violent, volatile move, while others are still holding on and others are buying the dip. There’s no telling which of the two sides are correct, but after a more than 60% drop in Ethereum, the worst could be behind. Another 50% drop from here still wouldn’t take Ethereum below 2020 prices, so anything is possible.
Cryptocurrencies are the future, and Ethereum is quickly becoming the most important blockchain around, even giving Bitcoin a run for its dominance. While a flippening may never happen due to Bitcoin having significant first mover advantage, there is always a chance that Bitcoin ultimately fails due to energy concerns and Ethereum takes the top spot.
After the high gas fees and explosive ETH run, many Ethereum killers started to gain ground. Even Binance released an alternative chain that picked up a lot of interest. For example, the Covesting utility token COV started as an ERC-20 token only, and later the developers released a bridge to Binance Smart Chain as a BEP-20 token.
Binance Smart Chain and other side chains all crashed also along with BItcoin and Ethereum, which is why the market is suddenly so interested in trading again over holding.
Why Trade Ethereum CFDs Instead Of Holding?
Holding from the highs has left many investors with massive losses in their portfolios, depending on when they bought into the altcoin. If they got in around 2020, they are safe, but if they bought Ethereum any time from the second month of 2021 or beyond, there is a high chance they are now holding at a loss.
Trading Ethereum instead of holding could have increased profits, or potentially one’s ETH stack. For example, an ETH-based margin account at PrimeXBT will allow anyone to trade crypto CFDs to go long or short Ethereum at any time, from anywhere in the world. PrimeXBT offers accounts in BTC, ETH, and stablecoins USDT and USDC. Crypto CFDs consist of Bitcoin, Ethereum, Litecoin, EOS, and Ripple.
Rather than only holding ETH, investors can trade CFDs instead and go short Ethereum when the market begins to turn. When the uptrend resumes, these same traders can go long and make even higher profits than holding spot alone. Investors can continue to hold spot ETH or as an ETH margin account in addition to trading Ethereum and other crypto CFDs for the best of both worlds.
How To Trade Ethereum On PrimeXBT
Even a small margin trading account with CFDs can hedge spot positions so that when markets get nasty, as a holder you aren’t left holding heavy bags. Hedging short will add to your stack and keep capital in USD value stable. Having flexibility when trading a highly volatile asset class like cryptocurrencies or even just Ethereum can protect against unwanted market volatility by allowing you to profit from it instead.
With stop loss orders, take profit orders, and built-in charting tools, anyone can learn to trade Ethereum CFDs effectively. For those that still struggle, PrimeXBT offers a company blog with trading tips and guides, and the Covesting copy trading module. The tool brings followers and strategy managers together so that followers can copy the trades of proven successful strategy managers. Strategy managers are ranked by total profits, and can grow their capital by trading Ethereum CFDs and more using the award-winning trading platform.