In recent years, cryptocurrency trading has gained immense popularity. In this context, day trading has emerged as one of the most lucrative ways to profit from the volatile nature of this market. However, with thousands of cryptocurrencies in existence, it’s hard to know the best crypto to day trade and achieve your goals.
That's where this comprehensive guide comes in. In this article, I’ll delve into the world of cryptocurrency and show you how to pick crypto for day trading. By the end of this guide, you'll be ready to start practicing on top exchanges like Binance, Bybit, or Coinbase!
Keep in mind, though, that this is not financial advice. The list below is composed based on the popular opinion among many crypto enthusiasts. To make a wise financial decision, consider consulting with a financial advisor.
The 7 best cryptos for day trading that will be discussed here are:
- Bitcoin (BTC)
- Ethereum (ETH)
- Binance Coin (BNB)
- Ripple (XRP)
- Cardano (ADA)
- Dogecoin (DOGE)
- Solana (SOL)
So, let's get started!
What is Day Trading?
Before looking for the best crypto to day trade according to your needs, it’s important to understand what day trading is and how it works.
Day trading is a trading strategy where traders buy and sell financial instruments, including cryptocurrencies, within a single trading day to profit from price movements. Day traders aim to make quick profits by taking advantage of small price fluctuations, typically using leverage to amplify their gains.
The goal of day trading is to buy low and sell high or sell high and buy low, depending on whether the trader is going long or short on the asset. Long positions involve buying an asset with the expectation that its price will rise, while short positions involve selling an asset with the expectation that its price will fall.
Day traders usually use technical analysis tools and chart patterns to identify profitable trades. They look for trends, support and resistance levels, and other indicators to find entry and exit points for their trades. These investors also consider factors like volatility, volume, liquidity, and media information to make decisions.
In summary, day trading is a high-risk, high-reward trading strategy used by cryptocurrency enthusiasts to profit from short-term price movements. If done correctly, day trading can be a lucrative way to make money in the cryptocurrency market.
Now let’s learn the basics of how to pick crypto for day trading!
Best Crypto to Day Trade: What About the Cryptocurrency Market?
To choose the best crypto to day trade and maximize your profits, understanding the current crypto market is a must!
The cryptocurrency market has come a long way since the inception of Bitcoin in 2009. With the introduction of tens of thousands of new cryptocurrencies over the years, the market has grown significantly.
As of May 16th, 2023, the total value of all cryptocurrencies combined is around $1.17 trillion. The most popular cryptocurrency is Bitcoin, which is worth over $520 billion, followed by Ethereum at over $217 billion. And then there are also other popular cryptocurrencies like Binance Coin, Cardano, Dogecoin, Ripple, and so on.
In recent years, the cryptocurrency market has witnessed some significant changes, such as the increasing involvement of institutional investors, the launch of several crypto-related ETFs (exchange-traded funds) and futures contracts, and the rise of decentralized finance (DeFi) products.
All those changes might make it difficult to understand what is the best crypto for day trading among the ones that suit your investment profile, but that is why I’m here.
Just always keep in mind that the crypto market is highly volatile, with prices fluctuating rapidly, sometimes by significant amounts in a matter of hours or days. This volatility makes cryptocurrencies an attractive option for day traders, who aim to profit from short-term price movements.
In summary, the cryptocurrency market has evolved significantly over the past decade, and with the introduction of new technologies and investment products, it is likely to continue to grow and evolve in the coming years.
As a day trader, it is important to keep up-to-date with market developments and to carefully consider your trading strategy before making any trades.
With all this information to keep in mind, traders might feel confused about how to pick crypto for day trading, though. But, don't worry, I've picked out some of the hottest cryptocurrencies that pro day traders love, and we'll take a closer look at them together.
Did you know?
Compare Crypto Exchanges Side by Side With Others
All Crypto Exchanges may look similar to you but they're NOT all the same!
What is the Best Crypto to Day Trade in 2023?
Below, you'll find a few of the best cryptos to day trade in 2023 and beyond, according to many crypto enthusiasts. Just a reminder, though, this is not financial advice. I suggest consulting with a financial advisor before making any financial decisions.
Bitcoin - The Original Cryptocurrency
Bitcoin (BTC) is the most well-known cryptocurrency, and it's no surprise that many crypto enthusiasts consider it to be the best crypto to day trade. As the first and largest cryptocurrency by market capitalization, BTC is a staple in the crypto market and has shown resilience against market volatility over the years.
One of the biggest advantages of trading Bitcoin is its high liquidity, which means that there are always buyers and sellers available to trade with, making it easy to enter and exit positions quickly. Traders are able to work with their BTC 24/7, regardless of time zones.
Additionally, Bitcoin's price movements are generally driven by market sentiment and news, rather than the underlying fundamentals of the technology, which makes it easier to analyze and predict its price movements.
However, it's important to note that Bitcoin is also known for its volatility, which can create significant risks for day traders. In fact, the price of BTC can fluctuate by thousands of dollars within a matter of hours, making it crucial to have a sound risk management strategy in place.
When day trading Bitcoin, it's important to stay up-to-date with the latest news and developments that can impact the price of the cryptocurrency. This includes keeping an eye on regulatory changes, geopolitical events, and major announcements from companies or individuals in the crypto space.
For example, in 2021, Bitcoin experienced a surge in price after Tesla announced that it had invested $1.5 billion in it and planned to accept BTC as payment for its products. However, the price of BTC later plummeted after Elon Musk, Tesla’s owner, tweeted that Tesla would no longer accept Bitcoin due to environmental concerns.
Another important factor to consider when day trading Bitcoin is the availability of trading tools and platforms.
Because of Bitcoin’s popularity, there are many different platforms and tools available to help traders analyze and execute trades more effectively. Some popular tools include technical analysis charts, news aggregators, and trading bots. This is one of the reasons BTC is constantly mentioned as the best crypto to day trade!
Technical analysis charts can be particularly useful for day traders, as they allow you to analyze Bitcoin's price movements over time and identify patterns that can help you make informed trading decisions.
News aggregators can also be helpful, as they allow you to stay up-to-date with the latest news and announcements that can impact the price of Bitcoin.
Finally, trading bots can help you execute trades automatically based on pre-set criteria, such as price movements or technical indicators. However, while trading bots can be helpful, it's important to note that they can also be risky, as they rely on algorithms that can be impacted by market volatility and unexpected events.
Overall, Bitcoin can be a lucrative crypto to day trade, but it's important to do your research and have a solid understanding of the risks involved. With the right strategy and tools in place, however, day trading Bitcoin can be quite a profitable venture.
Ethereum - The King of Smart Contracts
Ethereum (ETH) is among the most popular cryptocurrencies in the world, and investors always mention ETH when talking about the best cryptos to day trade.
Often referred to as the "King of smart contracts", Ethereum established itself by allowing developers to build decentralized applications (dApps) on its blockchain. These dApps can be used for a wide range of purposes, from managing supply chains to creating new forms of digital art.
One of the main reasons why Ethereum is so popular among traders is its high liquidity. This means that there are always buyers and sellers available on the market, making it easy to enter and exit trades quickly.
Additionally, Ethereum is one of the most well-established cryptocurrencies, having been around since 2015, which means that it has a large and dedicated community of users and developers.
Another advantage of Ethereum is its scalability, a factor that pumped Ethereum all the way up as one of the best cryptos for day trading.
Do note that the Ethereum blockchain went through a major upgrade in 2022, migrating from a Proof-of-Work to a Proof-of-Stake consensus mechanism. This upgrade made Ethereum an even more attractive option for day traders, as it reduced ETH’s energy footprint, increased its scalability, and decreased transaction times for the network.
If you're interested in day trading ETH, there are a few things to keep in mind, though. First, be sure to do your research and stay up-to-date on the latest developments in the Ethereum ecosystem. This will help you make informed trading decisions and avoid any unexpected surprises.
Besides that, be sure to use a reputable exchange with low fees and high liquidity. Some popular options for trading Ethereum include Binance, Coinbase, and Bybit. Finally, always remember to use proper risk management techniques, such as setting stop-loss orders and never investing more than you can afford to lose.
Overall, Ethereum is a promising cryptocurrency for day traders, thanks to its high liquidity, scalability, and potential for growth. By staying informed and taking a disciplined approach to trading, you can follow other day traders’ footsteps and take advantage of this exciting market opportunity.
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Binance Coin (BNB) - Crypto With a Real Use Case
Binance Coin (BNB) is the native token of Binance, one of the largest cryptocurrency exchanges in the world. And no one in their right mind would leave BNB out of the best cryptos to day trade list, as it is constantly mentioned by professional day traders.
Launched in 2017, Binance Coin has quickly risen in popularity due to its use as a means of payment for trading fees on the Binance exchange. In addition to its utility on the exchange, BNB has also become a popular investment choice for crypto traders and investors.
One of the main benefits of day trading Binance Coin is its liquidity.
Binance is one of the most active exchanges on the market, with a daily trading volume that consistently ranks among the highest. As such, BNB offers traders a high level of liquidity, making it easy to buy and sell quickly at competitive prices.
Another advantage that makes Binance Coin one of the best crypto to day trade is its volatility.
Like many other cryptocurrencies, BNB is known for its price swings, which can offer traders the opportunity to profit from short-term price movements. However, it's important to note that this volatility also means that BNB can be a risky investment, and traders should always be aware of the potential downside risks.
In terms of technical analysis, Binance Coin has shown a strong upward trend followed by relative stability in recent years.
In 2021, BNB experienced a significant price increase, reaching an all-time high of over $690 in May of that year. While the price has since gradually retreated, experts point out that BNB has remained relatively stable compared to other cryptocurrencies.
One factor that may contribute to the long-term growth potential of BNB is the popularity of the Binance exchange. As the exchange continues to expand its offerings and user base, the demand for BNB as a means of payment for trading fees is likely to increase as well.
Additionally, Binance has been actively expanding into new markets, such as decentralized finance (DeFi), which could further increase demand for BNB.
Overall, Binance Coin is a popular choice for day traders looking for a liquid and volatile asset with strong growth potential. However, as with any investment, it's important to conduct thorough research and risk management strategies before making any trading decisions.
Ripple (XRP) - Fast and Secure Transactions
Ripple (XRP) is a cryptocurrency that has been gaining a lot of attention in recent years, particularly for its use in cross-border payments. As of May 2023, it has a market capitalization of over $21 billion, making it one of the best cryptos to day trade according to many experts. Ripple is also an open payment network.
One of the main advantages of Ripple is its fast transaction speed. Transactions on the Ripple network can be completed in just a few seconds, compared to several minutes or even hours for other cryptocurrencies like Bitcoin. Many day traders find XRP ideal for those who are looking to capitalize on short-term price movements.
This is possible because of Ripple’s consensus algorithm, which allows for faster transaction processing and increased scalability. Instead of using Proof-of-Work, Ripple uses a consensus protocol called the XRP Ledger Consensus Protocol, which enables the network to process up to 1,500 transactions per second.
In addition, Ripple has an active development team that is constantly working to improve the network and its features. This includes the development of the XRP Ledger, which is a decentralized platform that allows for fast and secure transactions.
When it comes to day trading Ripple, it's important to keep a close eye on market trends and news related to the cryptocurrency.
Day traders should also pay attention to the technical indicators, such as moving averages and relative strength index (RSI), to help identify potential entry and exit points. It's also important to have a solid understanding of risk management and to set stop-loss orders to minimize potential losses.
In conclusion, Ripple is a promising cryptocurrency for day trading in 2023 (some might even say it's the best crypto to day trade) due to its fast transaction speed and solid development team. However, day traders should carefully monitor market trends and news related to Ripple, as well as use technical indicators and risk management strategies to maximize their profits while minimizing their risks.
Cardano (ADA) - Smart Contracts That Enable Many Use Cases
Cardano (ADA) is a decentralized, blockchain-based platform that was founded in 2015 by Charles Hoskinson, one of the co-founders of Ethereum. ADA is considered by many traders one of the best cryptos to day trade.
The Cardano platform utilizes the Ouroboros Proof-of-Stake (PoS) consensus mechanism. This revolutionary mechanism has enabled cryptocurrencies to adopt an energy-efficient consensus model, making it a significant advancement in the crypto space.
One of the key features of Cardano is its use of smart contracts. ADA’s smart contracts are self-executing, with the terms of the agreement between buyer and seller being directly written into lines of code.
This allows for a wide range of applications, including the creation of decentralized finance (DeFi) applications, digital identity systems, and more.
In terms of day trading, Cardano has shown a lot of promise. ADA is a popular third-generation cryptocurrency that has seen significant price growth and demonstrated resilience during market downturns. It has practical applications for its users and multiple growth catalysts, making it an asset investors should watch.
Another factor that could make Cardano a good choice for day trading is its relatively low market capitalization compared to other cryptocurrencies like Bitcoin and Ethereum. This means that the price of ADA can be more easily influenced by market forces, which can present opportunities for short-term gains.
Besides that, as I've already established many times, cryptocurrencies are known for their volatility. So, the price of ADA can fluctuate rapidly in response to news, market sentiment, and other factors. As with any investment strategy, though, it's important to do your own research and understand the risks involved before making any trades.
In summary, Cardano is a promising cryptocurrency that offers a range of features and applications, including smart contracts and decentralized finance.
Cardano’s liquidity, volatility, and relatively low market capitalization could make it a pretty good choice for day traders, but it's important to approach trading with caution and do your own research before making any decisions.
Dogecoin (DOGE) - A Memecoin That Came to Stay
Dogecoin (DOGE) has been among the most talked-about cryptos over many years, thanks to its unique backstory and meme-inspired branding. But beyond the hype, is DOGE one of the best cryptos to day trade in 2023? Let's take a closer look.
First, it's important to note that Dogecoin has been extremely volatile in the past. In early 2021, the cryptocurrency experienced a massive surge in value, with its price increasing by over 10,000% in just a few months.
However, this was largely driven by hype and speculation rather than any fundamental factors, and the price subsequently crashed just as quickly. That being said, Dogecoin can still be a profitable choice for day traders who are willing to take on some risk.
One reason for this is the high trading volume that DOGE sees on a daily basis. This means that there are plenty of opportunities to buy and sell the cryptocurrency quickly and potentially profit from short-term price movements.
Another factor to consider is the overall sentiment around Dogecoin. While it may not have the same level of hype that it did in early 2021, there is still a dedicated community of supporters who are passionate about DOGE. This means that positive news or developments related to Dogecoin could lead to a surge in price, at least in the short term.
Now, as I already said, Dogecoin’s value is largely based on sentiment and speculation, rather than any underlying technology or use case. This translates to a greater risk of sudden and significant price swings, which can be both a blessing and a curse for day traders.
Overall, Dogecoin can be a pretty good choice for day traders who are comfortable with a higher level of risk and volatility.
However, it's important to approach it with caution and stay up-to-date on any news or developments that could impact its price. By doing so, day traders may be able to maximize their profits by taking advantage of short-term price movements in this unique and quirky cryptocurrency.
Solana (SOL) - As Scalable as They Come
Solana (SOL) has gained a lot of attention in the crypto market recently and many investors considered it one of the best cryptos to day trade. There are several reasons why Solana is a promising cryptocurrency for day traders.
Solana is a blockchain platform designed for fast and low-cost transactions. The platform uses a consensus mechanism that allows SOL holders to participate in securing the network and earn rewards for doing so.
One of the main advantages of Solana for day traders is its scalability. The platform can process over 65,000 transactions per second, making it one of the fastest blockchains in the world. This is thanks to its unique architecture, which uses a combination of Proof-of-History and Proof-of-Stake to achieve high throughput and low latency.
Another advantage of Solana is its growing ecosystem of decentralized applications (dApps). The platform has attracted many developers and projects, and there are already many dApps built on top of Solana. As the ecosystem continues to grow, the demand for SOL is likely to increase, which could potentially drive up its price.
However, like any cryptocurrency, SOL is subject to volatility and market fluctuations. In mid-2022, SOL experienced a significant price drop, along with the rest of the market. Still, Solana has been showing signs of recovery in recent months, and some analysts predict that it could reach new all-time highs in the near future.
But keep in mind: these predictions are not set in stone, so you should do your own research before investing in SOL. While I do want to help you understand a bit more about the cryptocurrency market, I’m not here to give you any sort of financial advice!
In conclusion, Solana is a promising cryptocurrency for day traders in 2023 and beyond. Its fast and cheap transaction processing speed, growing ecosystem of dApps, and potential for price appreciation make it an attractive option for traders.
How to Start Day Trading?
Now that you’ve selected the best crypto to day trade that fits your needs, it’s time to start your day trading journey.
Even though day trading is a popular way to make money in the cryptocurrency market, it's important to know what you're doing before you start. Here are some steps you should take to get started with day trading:
✓ Understand the basics of day trading. Day trading involves buying and selling cryptocurrencies within a single trading day, with the goal of making a profit. It requires a deep understanding of market trends, technical analysis, and risk management. Before you start day trading, take the time to learn these fundamentals. You can check out our Crypto 101 Handbook, which covers these and many more other topics.
✓ Choose a reputable exchange. There are many cryptocurrency exchanges out there, but not all of them are created equal. Look for an exchange that has a good reputation, high trading volume, and strong security measures. Some popular options include Binance, Coinbase, Kraken, and Bybit.
✓ Set up your trading account. Once you've chosen an exchange, you'll need to create an account and fund it with cryptocurrency or fiat currency. Most exchanges require you to go through a KYC process to verify your identity before you can start trading.
Additionally, you can get a hardware wallet (also known as cold storage) to store your private keys offline. There are many excellent hardware wallets choices, such as Ledger Nano X or Trezor Model T.
✓ Develop a trading strategy. To be successful at day trading, you need a solid strategy. This might involve using technical indicators to identify trends, setting stop-loss orders to minimize losses, or taking advantage of news events to make quick trades. Experiment with different strategies to find what works best for you.
✓ Start small. Day trading can be risky, so it's important to start small and only invest what you can afford to lose. As you gain experience and confidence, you can gradually increase your trading volume.
✓ Keep a trading journal. To improve your trading skills, it's important to keep track of your trades and analyze your performance. Record your trades in a journal and review them regularly to identify patterns and areas for improvement.
✓ Manage your risks. Day trading can be highly volatile, so it's crucial to manage your risks. This might involve setting stop-loss orders, diversifying your portfolio, or avoiding high-risk trades. Make sure to align your risk management tools with your trading strategies and your goals.
So, by following these steps, you can start day trading cryptocurrency with confidence. Just remember that day trading requires discipline, patience, and a willingness to learn from your mistakes. With time and practice, though, you could become a successful day trader and maximize your profits in the crypto market!
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In summary, day trading cryptocurrency can be a highly lucrative but risky venture. With great potential rewards come great risks! To maximize your profits, you must do your due diligence, research the best cryptos to day trade, and monitor market trends carefully.
As we have discussed, several factors affect the suitability of a cryptocurrency for day trading, such as liquidity, volatility, trading volume, and market sentiment. By considering these factors, you can identify the best crypto for day trading that suits your needs and goals, and minimize your risk.
In addition, advancements in technology and increasing institutional adoption of cryptocurrencies are likely to drive growth in the market in the coming years. This could provide even more opportunities for day traders to profit from the market!
Overall, day trading cryptocurrency can be an extremely rewarding endeavor for traders who are willing to put in the effort to research and stay informed. Just don’t forget to do your trading on trusted exchanges such as Binance, KuCoin, Bybit, or Kraken.
By carefully selecting the best cryptos for day trading, choosing a good exchange to trade on, managing risks, and staying disciplined, traders can maximize their profits and take advantage of the opportunities presented by the cryptocurrency market in 2023 and beyond!