Top 7 Cryptocurrency Pairs to Trade for Beginners
Welcome! If you are reading this article, then that means you are doing great in your research about cryptocurrencies and trading. Good job!
As of 2021, there are already over 6,000 cryptocurrencies and it is believed that 90% of the total crypto market comes from the top 20 cryptocurrencies. As you read this, you may be having a hard time deciding on which cryptocurrencies to buy and trade on.
To begin, let us review some terms that you must be familiarised with if you are getting ready to hop into this crypto trading journey.
Definition of Terms
- Cryptocurrencies – refers to a form of digital or virtual currency. It may be used to buy goods and services like dollars, pounds, euros, and yen. However, the cryptocurrency has no tangible equivalents, such as banknotes or coins that can be carried about; it only exists in electronic form.
- Alternative Coins (Altcoins) – refers to any digital cryptocurrency that was established after Bitcoin’s popularity; the moniker “alternative to Bitcoin” comes from this. Some of the famous altcoins today are Ethereum (ETH), Litecoin (LTC), and Cardano (ADA).
- Cryptocurrency Pairs – also known as trading pairs; it is the asset pair being exchanged (usually one cryptocurrency for another). One example of this is BTC/LTC.
- Liquidity – is the capability of a currency to be easily exchanged into cash or other coins. Low liquidity levels indicate that market instability exists, resulting in price surges in cryptocurrencies. Meanwhile, high liquidity indicates that the market is steady, with little price swings.
- Base Currency – also known as transaction currency; it is the currency that appears first in a currency pair quotation.
- Quote Currency – also known as counter currency; it is the currency that appears second in a currency pair quotation.
- Trading Volume – also known as volume; it is the number of units exchanged in a market at a particular moment. It is a count of how many individual units of an asset changed hands during a certain period.
Is cryptocurrency trading the same as forex (foreign exchange) trading?
Trading currencies is a part of crypto trading, just like it is in forex. The FX market, on the other hand, is larger and more established, whereas the crypto market is a very new entrant.
There are a few things to bear in mind when trading cryptocurrency. To begin, major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) exist in the same way as major fiat currencies like the USD, JPY, GBP, and EUR exist. These big cryptocurrencies have the most trading volume and are used as a base currency for both fiat and other cryptocurrencies.
What are the leading cryptocurrency pairs?
Great! We have arrived in this section! Check out these seven most traded pairs that you would want to consider in your crypto trading journey:
- BTC/USD – The most popular trading pair is Bitcoin (BTC) against the US Dollar. In this case, BTC is the base currency, and one BTC is equal to one dollar. The high volatility of BTC/USD makes it a viable alternative to traditional forex markets. Bitcoin traders may profit from price fluctuations at any time. You may profit from the price difference by going long or short based on the Bitcoin to USD price movement.
- ETH/USD – Ethereum (ETH) is the second-largest cryptocurrency next to BTC. Because Bitcoin and Ethereum are traded on most of the world’s exchanges, they have a lot of liquidity. ETH/USD can fluctuate by less than 5% over the trading day, with more than 10% swings on rare occasions. The value of Ethereum in US dollars can also follow a distinct trend with varying degrees of intensity.
- LTC/USD – Another popular pair is Litecoin (LTC) against the US Dollar. LTC uses Bitcoin’s foundations but seeks to improve on its currency appeal. The LTC to USD price fluctuates during the trading day, although only by a few percent. With typical market retracements and rebounds, traders may expect a monthly fluctuation in the LTC/USD price of up to 10%.
- XRP/USD – Ripple (XRP) is one of the major cryptocurrencies. The XRP to USD has a good amount of volatility, and the volume guarantees that deals are executed quickly.
- ETH/BTC – Because it is made up of the most prominent cryptocurrencies, the Ethereum (ETH) to Bitcoin (BTC) currency combination is quite popular. Within 30 days, the ETH to BTC exchange rate may vary by more than 5%. Depending on what’s going on in the crypto market, the daily price shift might be as high as 10%.
- BTC/USDT – The pairing of a strong cryptocurrency and one of the strongest and most popular stable coins, Bitcoin (BTC) to Tether (USDT), allows trading a strong cryptocurrency against one of the strongest and most popular stablecoins.
- LTC/BTC – The Litecoin (LTC) to Bitcoin (BTC) pair is appealing to traders since it is made up of well-known cryptocurrencies and can provide a greater number of trading signals.
How do I choose the best cryptocurrency pairs?
First: Analyse the popular pairs on most exchanges.
These pairs tend to be successful because there is global demand for them, making it for traders to easily find buyers for these pairs at the right moment. As you can see in the list above, Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) are a few of the leading cryptos.
Second: Check the trading volume of different cryptocurrencies.
It is the greatest approach to locate profitable trading pairings on the crypto market.
It’s important to remember that the crypto market is volatile. To minimise the risk of crypto trading, continue to research more about your preferred crypto-asset(s). If you are searching for a user-friendly trading platform, Bitcoin Up is an excellent place to start your journey!
The Bitcoin System is compatible with a wide range of currencies, including Bitcoin, EOS, Litecoin, and Ethereum. Fiat currencies like USD are among the more than forty currency pairings it supports.