Which Altcoin Is Better to Trade on Margex?

Summary:
• There are thousands of altcoins out there, and the market is not getting any easier. So, how should you select an altcoin?

Most beginner traders wish to trade Bitcoin because it’s the most popular cryptocurrency; it’s discussed in the news and covered by analyst reviews every day. However, Bitcoin (BTC) trading is one of many options. There are numerous cryptocurrencies besides BTC (so-called altcoins) that may provide more attractive trading opportunities. Let’s consider which cryptocurrencies besides Bitcoin can be traded on Margex. 

How to Choose an Altcoin

There is no one perfect altcoin that will provide profitable trading opportunities daily. It’s vital to remember that the attractiveness of the cryptocurrency depends not only on basic fundamental factors but also on a trader’s strategy. 

Therefore, if you want to be equipped with altcoins for different conditions, you should diversify your portfolio with several assets. The factors below will help you identify the best altcoins for your approach. 

Fundamental Idea 

When choosing an alternative cryptocurrency to Bitcoin (BTC), remember that out of the vast range of coins and tokens, some are poorly reliable. They don’t have a real utility behind them, so they disappear within several days. You could object by saying that Dogecoin, a meme coin created as a joke, is still on the market. However, it’s an exclusion, not a rule. 

You should consider only those cryptocurrencies which have real utility. For instance, Ripple aims to provide businesses with a decentralized payment system where the XRP (XRP) token is a key element. That’s why XRP has stayed on the market for years and is still attractive to traders and investors despite the lawsuits Ripple Labs goes through. It’s one of the top 10 cryptocurrencies by market capitalization (CoinMarketCap data). 

Attractive Prospects

Besides the fundamental idea, you should consider a cryptocurrency’s advantages over other crypto assets. Competition between cryptocurrencies grows daily. That’s why you should be sure the altcoin you trade can outperform other cryptos. 

The number of applications is more important than the asset’s price. The more advantages the crypto project provides for the industry, the more likely it is to continue developing. Moreover, attractive cryptocurrencies are very liquid even with a low price. It means you don’t risk losing your funds just because there are no buyers/sellers on the market. 

For instance, Solana is one of the fastest blockchain platforms, which enables cheap and secure transactions due to its unique combination of proof-of-stake and proof-of-history consensus algorithms. It was developed to serve both crypto enthusiasts and corporate clients. The blockchain has its native token SOL, whose price reacts to its ability to attract new users. 

Another example is Uniswap (UNI). Uniswap is a protocol developed to enable the automated trading of decentralized finance (DeFi) tokens. It was launched in 2018 but became very popular this year because of the development of the DeFi industry.  

Clear Price Movements

In trading, it’s vital to correctly predict an asset’s price direction. Although there is an intuitive trading approach in which a trader opens and closes trades considering only their feelings, it’s not the best way if you are a serious trader. 

You should apply fundamental and technical analysis. And a pitfall is that many cryptocurrencies disobey the general rules — their direction is barely predictable. Therefore, it’s recommended to use assets with clear fundamental price triggers.

The leading cryptocurrency that reacts to macroeconomic and global political events is Bitcoin. You should choose altcoins with a high positive correlation with BTC—for instance, Ethereum (ETH). It’s the second cryptocurrency after Bitcoin, and in most cases, it follows BTC’s price direction. By trading Ethereum, you can easily identify where the price will go considering BTC movements. 

Also, it’s worth paying attention to cryptocurrencies that form accurate trends because trends are one of the easiest ways to predict future price direction. To trade in trends professionally, it’s vital to learn how to determine higher highs and lower lows in trading. 

Significant Price Movements

While beginner traders look for stable cryptocurrencies, professional traders choose assets that experience a high level of volatility but still have reliable fundamental ideas behind them. 

Cardano (ADA) is an example of such an asset. Cardano is a well-known blockchain platform used for various sidechains, decentralized apps, and smart contracts, while ADA is its native token. Although ADA’s price is relatively low, the asset is in the top 10 cryptocurrencies by market capitalization (CoinMarketCap data). 

Increased price fluctuations provide intraday traders with a larger number of trading opportunities. To predict the price direction of cryptocurrencies with significant price movements, you should learn the best chart patterns in trading by Margex. Chart patterns are an essential part of technical analysis. They provide accurate signals so traders can forecast a price direction even for assets with large price movements.   

Old but Alive

If you plan long-term trades, you should consider stable altcoins. By choosing cryptocurrencies with high volatility, you risk being kicked off the market. 

You may be surprised to see Litecoin (LTC) among the recommended altcoins for trading. This cryptocurrency isn’t as popular as it was recently. It rarely appears on the news. Some traders have even forgotten about it. However, it’s still alive. While numerous other cryptocurrencies appear and die, this altcoin is stable. 

Another example is EOS (EOS). EOS blockchain appeared in 2018 and was quite popular. However, since then, the EOS token has plunged by over 90% from its all-time high (CoinMarketCap data). Still, the cryptocurrency is used by traders because it’s not subject to high price volatility. 

Final Thoughts 

There is no one altcoin you should focus on. The cryptocurrency market is dynamic and full of numerous assets. If you choose only one cryptocurrency, you risk losing multiple trading opportunities. Pay attention to the abovementioned factors to set a portfolio of altcoins you can easily trade on Margex. Remember that not only highly-volatile assets can be attractive for trading.