Crypto futures are contracts on selling or buying digital coins on a pre-agreed day and at a pre-determined value. To trade crypto futures, traders analyze crypto price charts to find historical indicators and patterns to rely on when similar situations repeat; external events and global economy.
Bitcoin is the crypto market leader and the asset with the biggest capitalization and liquidity. The popularity of Bitcoin has risen in the last ten years. Despite a lot of skepticism about the crypto market because of the lack of regulation, instability, and decentralized nature, the number of people willing to join it is increasing. With the growing adoption of digital assets, the variety of trading tools is also increasing. So, advanced and complex tools emerge. Several crypto trading platforms offer expanded functionality for Bitcoins futures trading. What does this tool mean, and why is Bitcoin the best asset for it?
How to Trade Crypto Futures?
Futures are a common tool in financial markets. They imply price speculations based on the analysis of the market and its forecasts. Crypto futures are contracts on selling or purchasing digital coins on a pre-agreed day and at a pre-determined value. To trade crypto futures, traders analyze:
- crypto price charts to find historical indicators and patterns to rely on when similar situations repeat;
- news background;
- external events and global economy.
Gathering the information takes time, and the trader starts to understand the next price movement, so one may estimate what level the asset’s price can reach. Suppose one believes the crypto rate will grow, so he aims to sell his coins and profit from them. So the trader enters into a futures agreement where he mentions the asset’s value and the day when he will sell coins. If the trader believes the price will go down, one wants to protect his savings. So he sells coins and then buys them back at a lower value.
As we can see, the ability to predict the asset’s rate is crucial here. So it is important to choose crypto coins whose price is easier to forecast. That should be the less volatile assets with high liquidity levels and a large cap. Bitcoin fits these requirements the best, so futures on Bitcoin are the most popular. BTC is always in demand, has high liquidity, and is less sensitive to market fluctuations.
Where to Trade Bitcoins Futures?
If you are a beginner trader, pick a reliable and intuitive crypto platform that allows demo trading. This option will help you understand how to trade crypto futures and what risks you are ready to take. It will help you work out your trading style and methodology and to be consistent in every step you make. The WhiteBIT crypto exchange is the best option for futures trading, so check out its website and blog about the crypto market.