30 September 2021
Many crypto enthusiasts often ask the question “what is OTC Bitcoin?” In this guide, you will understand what this simple term is all about. OTC (over the counter) Bitcoin trading is a concept that has its basis in the fiat currency market structure. There are three parties involved during cryptocurrency trading - the buyers, the sellers, and the exchange platform.
The centralized exchange serves as an intermediary to facilitate transactions between the buyers and the sellers. The aim of OTC Bitcoin trading is to bypass the exchange and connect the sellers to the buyers directly.
Unlike conventional exchange platforms, OTC Bitcoin trading takes place in a decentralized and private way. This way, people can transfer large amounts of digital assets without affecting the market prices. They will be able to evade high transaction costs and unnecessary supervision. OTC Bitcoin trading addresses the challenges of cybersecurity attacks and trading limits.
There are several types of bitcoin trading that we will examine in a bit. However, there are two general methods for analyzing Bitcoin trades- fundamental analysis and technical analysis. The fundamental technique aims to predict price movement by staring at the bigger picture of the crypto market. Regulation changes among countries, global news, and technological development can affect the price of bitcoins. For example, Bitcoin's price will change instantaneously if the US decides to ban bitcoin.
On the other hand, technical analysis involves examining market statistics, past prices, and the movement of the trend of the market.
The goal of scalping is to make quick and small profits. At the same time, it aims to make the lowest losses possible. Scalpers hate to take massive risks.
They usually take trades for a few minutes per day without allowing their position to run too much. Scalping doesn’t generate large gains in the long run. It requires consistent focus, a sharp eye, luck, and efficient risk management.
Day trading is quite similar to scalping. With this method, you can make trades over the course of the day, instead of doing so within minutes. People who do this usually make more profits compared to scalpers. They also allow their positions to run while taking advantage of any significant volatility. An extended form of this method is intraday trading. Intraday trading involves holding your positions for more than a day. Since the cryptocurrency market never shuts down, the idea of a 24-hour trading day is simply a reference. People who do intraday trading utilize software that assists them to stay on track.
Range trading aims to take advantage of the moment when the market is fluctuating consistently between highs and lows. Range traders hold their short and long positions at different times, thanks to the clearly defined support and resistance bands. Since Bitcoin is a highly volatile asset, range trading can yield a significant amount of profit.
Swing trading is a very efficient method that technically advanced traders utilize. It involves picking a point to enter the market and holding that position when you hit your target. You could hold your position for a long time, usually days or weeks. You will watch the waves move upward and downward without any course for alarm. If you are proficient at identifying the best resistance and support levels, improve on your swing trading skills.
This is an elongated version of swing trading. Once you take a position, you will have to stick to it for months or years.
This takes an immense amount of discipline. You will sit through a lot of bullish and bearish markets. Position trading is very similar to investing because it takes place over a long period and the end goal is to amass big profit.
The OTC Bitcoin works almost the same way as the fiat OTC markets operate. Circle launched the first OTC crypto desk in 2014 because Chinese miners need to create liquidity in order to sell their assets.
Before you use the OTC Bitcoin market, you will need to assess your trading frequency and volume. If you plan to move a lot of funds, choose a major OTC desk. Otherwise, we would advise you to turn to standard trading platforms. Generally, here is a flow chart of the processes you will follow for OTC Bitcoin trading.
Nexthash is a platform that will make your life easier if you have plans to buy a significant volume of crypto assets. Whether you are an individual, hedge fund, or corporate institution, Nexthash has got you covered.
This global finance entity has fulfilled every legal criterion to function in major jurisdictions all over the globe. Here are the advantages of this OTC platform.
By now, you should have gotten an answer to the lingering question “what is OTC Bitcoin?” Most bitcoin transactions are private, compared to what many people think. What is OTC Bitcoin trading going to do to help people? Well, this decentralized system provides anonymity for its stakeholders because it follows no public book order.
It is also a good choice for “whales”, people who love to sell or buy large volumes of digital assets. When this set of people choose centralized cryptocurrency exchanges, slippage occurs, and the market structure flutters.
If you have any plans to buy or sell large volumes of bitcoin or other cryptocurrencies, don’t think too far. Nexthash is one of the best OTC platforms on the markets, whether you’re trading or you would just like to answer questions, like what is OTC Bitcoin? Register with us today, lower your risks and invest optimally.