After the recent crash in the price of bitcoin, crypto traders and investors in South Africa and other parts of the world have been looking for ways to protect their portfolios and make some gains despite the dip. While the price crash could be a nightmare for most traders, there are ways you can take advantage of the price fall to make some profit. Making profits isn’t limited to the bullish market, you can also make and withdraw some profit from bitcoin in South Africa when the price tanks.
Below are some ways you can profit from crypto in South Africa as bitcoin price tanks.
Crypto arbitrage opportunities have remained relatively unaffected whether bitcoin is in a bull or a bear market.
Crypto arbitraging is one of the strategies that offer great returns with low risk. In South Africa, crypto arbitrage is an effective way to make some profit because of the varying prices across the different exchanges, and also the difference in the price of Bitcoin in U.S. Dollars (USD) and South African Rands (ZAR).
Buying bitcoin with US dollars is slightly cheaper than when you buy bitcoin in South Africa with the Rand, so crypto traders can take advantage of this difference in either a bullish market or a bearish market. For any South African trader looking for how to buy bitcoin and make some money during this time, arbitraging is a very viable option.
All you have to do is buy BTC using USD on a foreign crypto trading platform and exchange it for South African Rand on a local exchange. You can consider the various exchanges in South Africa.
Look for two exchanges with varying prices, identify the arbitrage opportunity and execute your trade. Basically, you buy from the exchange with a lower price and sell at an exchange with a higher price. Selling the asset should however be done immediately. Delay in selling the asset might lead to a loss or reduction in profit because of the high volatility of bitcoin.
Take Short Positions
Taking short positions or shorting is basically the opposite of buying bitcoin or any other crypto asset with the hope that the value will rise later. Short selling is a strategy where the trader enters a market hoping that the value of the asset will drop below the entry price. In short selling, you are borrowing the cryptocurrency you want to short with the aim of returning it later.
Several exchanges allow you to carry out this strategy in South Africa. So the process involves borrowing the crypto you intend to short from the exchange and sell at the current price. After closing your position, you have to buy the same number of crypto back to refund the exchange, however this time you are buying the asset at a cheaper price. It involves selling the asset high and buying it low. For instance, you borrow 2 BTC and sell at $30k each, after closing the position, you buy back the 2 BTC at $25k each with this you can withdraw a $10k profit and refund the exchange with the 2 BTC you borrowed.
Buy the dip
When there is a sharp decline in the price of any cryptocurrency, one of the best ways to take advantage of the situation is to buy more of the asset. Buying an asset when the price dips can generate amazing returns. While this sounds like an easy way to make money, it requires some technical analysis to read the market right.
As bitcoin continues to trade at a low point, traders are using the opportunity to buy bitcoin in South Africa and HODL till the price reaches a new All-time-high (ATH).
Swing trading is a strategy that involves trying to predict the price movement of an asset within a specific period usually for a few days or weeks. Even as the market moves in a general direction, there will always be little price movements forming highs and lows. This strategy involves predicting these little price movements.
Implementing this strategy requires careful study of the market and reading charts to make the right prediction and entering of the trade at the right time. Technical analysis is very important when looking for trading opportunities. So the process involves making a prediction based on analysis, entering a position (long or short), and taking your profit if the market goes as predicted. So even in a bearish market, traders can take advantage of the little upward and downward swings to make some profit.
Buy coins with potentials
The bear market offers you the option to diversify your crypto investment portfolio and buy some good altcoins with strong growth potential at a very cheap price. So instead of putting all your eggs in one basket, you can decide to improve your chances by buying these altcoins. While one is performing poorly another might be doing great. Not all low valued coins have potential, so it is important to research the project before investing your funds.
In conclusion, there are several ways you can make and withdraw some profit during a crash in the market. However, do not panic sell an asset because it is dipping, although you can sell part of your holdings to reduce the risk. Remember to stay calm in these situations.
Have you been looking for an opportunity to make a profit with BTC in South Africa or any other cryptocurrency? This might be your chance don’t let the dip discourage you.
Read about the African countries leading the race of crypto adoption