Long-term crypto investing strategies often boil down to “buy and hold” but how to make money trading in the meantime? You use short-term trading strategies! The ChangeHero team has compiled a list of tokens that have high volatility which can present the most opportunities for short-term trades.
Disclaimer
This article is not a piece of financial or investment advice. When dealing with cryptocurrencies, remember that they are extremely volatile and thus, a high-risk investment. Always make sure to stay informed and be aware of those risks. Consider investing in cryptocurrencies only after careful consideration and analysis of your own research and at your own risk.
Key Takeaways
- Compared to long-term investing and trading, short-term trading on the crypto market has a few distinctions. It is encouraged to sell for profit, rely on technical analysis, and trade often.
- Short-term trading favors coins with high volatility. They may include tokens with weak fundamental value, which are recommended to be avoided for the long term.
- We review ten cryptocurrencies that have monthly volatility ranging from 15% to 150%. They are mostly from the mid-to-low market capitalization and cover many categories: meme coins, decentralized finance, utility and governance tokens.
Short-Term Trading’s Peculiarities
Unlike swing trading, holding, or other long-term-oriented trading strategies, short-term trading has a few noteworthy features. They can be summarized as follows:
- Quantity over quality
- Technicals over fundamentals
- Volatility over stability
Let us explain each point in more detail. Firstly, quantity over quality refers to the number of trades and orders. Short-term traders prefer making more trades in shorter intervals even if it means that the profits from these quick trades are small. The key to this strategy is to make a lot of small successes until they compound into good profits. Keep in mind that this applies to losses and expenses such as market fees, too.
Secondly, short-term price fluctuations are rarely grounded in any fundamental reasons. Conversely, technical analysis, which was developed by studying the behavior of traders under certain conditions, has proven to be more effective. If certain sentiments find reflection in charts, there is a higher chance that other savvy traders will be the first to react.
Thirdly, stable assets are good for hedging or long-term investing but short-term trading them is a hassle that can end up wasting your time and money. Assets with higher volatility pose higher risks in the long term but if you manage to anticipate the price fluctuations, you can turn the frequent changes to your advantage. That, in turn, requires a keen eye to spot any signs of change, deep knowledge of signals and the market, and a bit of luck. Otherwise, the bad trades will compound quicker than you will be able to notice.
How to Profit from Short-Term Trading?
In other words, short-term crypto trading is an activity that we cannot recommend to anyone with a low risk tolerance or not yet used to the crypto market’s specifics. If you still feel confident and want to try it, let us give a few words of advice.
Pace Your Trades
Short-term trading strategies range from bot-assisted high-frequency trading to hourly to daily day trading. You will not achieve higher results by pushing yourself to upping the tempo of your trading. If anything, it can lead to more stress, which will not improve your decision-making. Try finding the time frame in the sweet spot between too fast to react correctly and too long to keep patience. Being consistent is not obligatory, though, because the price action can accelerate or slow down.
Keep an Eye on the News
Crypto news can turn the lull on the market into a bloodbath, and you wouldn’t want to miss the chance to react. One eye on the news and another on the charts would be an overkill, though. You can set alerts for specific terms and topics or check the feeds at dedicated pauses in between trading.
Easy Come, Easy Go
Short-term traders should not let anyone calling them “paper hands” get under their skin. So what? Your goal here is to make a quick buck, not to see an asset grow over time. Long and short positions, buying and selling — change up your approach as the situation on the market is changing.
The saying from the heading can mean something different, too: you will inevitably gain some and lose some. Focusing on one result too much can lead you to lose rational thinking: cut your losses or take your profits before you lose it all. Speaking of which…
Use Stop Loss and Take Profits
Lastly, a reminder that almost always goes together with tips for short-term trading. This is the kind of activity that lets you have an exit plan and precautions in advance, so use this opportunity. If you are used to this strategy, this should come naturally to you but a beginner can overlook it. Better safe than sorry!
Ten Crypto Assets with High Volatility
SaitaChain Coin (STC)
The champion in this category is SaitaChain Coin (STC), previously SAITAMA. According to the data from TradingView, its monthly volatility is estimated at 148%. This is clear when looking at the price chart:
There are a few reasons for this coin to be this volatile. For one, it is traded only on a couple of markets: the Uniswap decentralized cryptocurrency exchange (DEX) in a pair with WETH and Gate.io (with USDT). To add insult to injury, the slippage and spread in these markets are high as well.
Surprisingly, STC is still outperforming the largest crypto asset market: while the value across the board is down, it is up 2.1% this week. Crypto assets with high volatility can behave in unexpected ways, giving you a chance to make a profitable trade while more stable assets decline.
Before you buy into a coin like this, it wouldn’t hurt to learn: what is SaitaChain (STC)? This is an Ethereum and BNB Chain token of the Saita ecosystem, which originated as the Saitama Inu meme coin. The community and team of the token decided to depart from this status to something more serious and made the first migration to the SAITAMA v2 token contract.
SaitaChain is the second rebrand under new management, which was followed by another migration. The new platform promises to deliver decentralized applications, a payments app and card, a realty company, and an AI-powered logistics company — among other things. Big promises and frequent migrations for this small-cap asset do not seem to be universally popular, making the sentiment very uneven, and, as a result, the crypto asset is even more prone to volatility.
All in all, this is a typical low-cap altcoin that exhibits extreme volatility due to its fundamentals and low number of markets. Some of its pros include a wide range of short-term price fluctuations and occasional decoupling from market trends. The cons are low liquidity and spreads or slippage, as well as a dubious fundamental value.
Prosper (PROS)
The rest of the assets on our list do not have volatility over double digits. Nonetheless, they can still give you the chance to capitalize on price swings while being more or less stable by comparison.
The native token of the cross-chain liquidity and prediction market platform Prosper PROS is estimated to have a 19.66% volatility rate. At the same time, it can be found on many popular centralized crypto exchanges, making it more accessible for trading and more liquid.
The PROS token is advertised as a utility token for the crypto community of Prosper, giving access to features such as prediction insurance and a governance token for the DAO. Looking at the chart, though, we can say that PROS is good for another purpose: short-term trading.
Like STC, PROS is also on the lower side of market capitalization but it has considerably more markets. Most of its trading volume comes from Binance. The platform itself does not seem to have any open prediction pools at the moment but the trading activity in the PROS markets is as high as ever. A token with a concrete use case but barely any use outside of trading would be a red flag for some long-term investors. For the ends of short-term trading, though, it is more than acceptable.
UMA
The UMA token entered the ranks of the most volatile cryptocurrencies this month thanks to the explosive growth a week ago. A 100+% price increase brought the volatility of UMA up to 19.96%.
As is often the case, this boost was caused by the news about the protocol development. More particularly, an announcement and launch of Oval, a product that can help with “oracle extractable value” (OEV). Simply put, Oval wraps Chainlink Price Feeds and lets the protocols that use them auction first access to the data without any delays or extra expenses. The update seems to have been met with much demand, causing the UMA token price to surge to $6.90.
Is it too late to get UMA? The value added by the launch of Oval seems to be here to stay but there is a chance that a price increase so sharp will cause the price to fluctuate for a while.
Ethereum Name Service (ENS)
Ever since Vitalik Buterin endorsed L2s and Ethereum Name Service in early January, the price of the ENS token has been steadily increasing. This netted it one of the highest rates of volatility (18.3%) in the crypto market these days.
Long-term-oriented traders and investors may be interested in our recent ENS price prediction. Traders who prefer shorter time frames will not be disappointed in the price action either. As an added benefit, this token has some of the best trading volumes, current market capitalization, and liquidity in the list we compiled.
In case you do not know what Ethereum Name Service (ENS) is, this is an analog to Domain Name System (DNS) for the Ethereum and blockchain networks. Users can buy NFTs that give them access to a domain name, usually ending in “.eth”, to use instead of a blockchain address. The long-term value of such crypto projects is clear, but some factors can influence the ENS price in the short term, too. ENS is a governance token of the ENS DAO, and depending on which proposals are active, the demand can fluctuate.
Mdex (MDX)
Not all coins that experience high volatility are this way because their prices increase. The utility token of Mdex, MDX lost 40% in a month and recorded an 18.25% rate of volatility. However, to a trader, this can also present an opportunity: from an entry point to shorting.
Mdex is a decentralized exchange and liquidity aggregator that uses blockchain technology and the concept of fund pools and has a dual-chain architecture. Thanks to the cost-effectiveness and low friction on the Huobi Eco Chain (HECO), users can tap into Ethereum-based asset trading for a fraction of the cost.
The reason MDX is down is an update to crypto asset monitoring on Binance. The centralized crypto exchange has put a notice for the MDX traders, warning them of excessive volatility in this market. This label also means that MDX is at risk of being delisted from Binance for failing to meet the monitoring criteria.
Be mindful of there being two versions of the MDX token: HECO and BNB Chain. They are tracked separately and there can be a slight difference in the price of the assets. This can present some inconvenience but also an opportunity to arbitrage.
MetisDAO (METIS)
Metis is a layer-two scaling solution for Ethereum that uses optimistic rollups, which puts it in competition with Optimism, Base, and Arbitrum. To measure up, they developed hybrid rollups, combining them with zero-knowledge proofs. At the time of writing, Metis ranks seventh among Ethereum rollup solutions by TVL.
The governance token of MetisDAO is seeing nice trading volumes with a healthy distribution between platforms. The upside bias in the price change during the past month was caused by the network development. Now it gravitates to its past values, and its price action being more or less predictable creates fine conditions for short-term trading.
Milady Meme Coin (LADYS)
Honestly, we are surprised as you probably are to learn that there are more volatile assets than a meme coin with no intrinsic value. LADYS’ monthly volatility is estimated to be around just 16.39%.
With barely any fundamentals to back the value of a digital currency or token up, long-term trading of such assets will hardly produce any meaningful results. However, they are very popular with speculative investors and short-term traders for a reason. An abundance of platforms and cryptocurrency markets makes it easy and volumes ramp up.
Perpetual Protocol (PERP)
The last non-meme coin in our list is Perpetual Protocol, which seems to have had a 15.9% rate of volatility due to an early January pump. It seems to have been caused by a token unlock and whale activity.
For a short intro to those who would like to get an idea about Perpetual Protocol before buying in: it is a futures DEX on Ethereum and xDai. PERP is its utility token, also used in governance and staking.
Normally, PERP also experiences some noticeable volatility, as mid-to-low-cap altcoins do. It is available on the majority of popular centralized crypto exchanges, making it accessible and facilitating the rise in the trading volume.
Bonk (BONK)
This Solana-based dog-themed meme token became widely known thanks to its explosive rally late in 2023. These days, it is trading with a far more reasonable volatility of about 16.19%.
As far as dog meme coins go, Bonk is as viable as DOGE or SHIB. We have already mentioned that these tokens are particularly popular with short-term traders. It has also been picked up by popular cryptocurrency exchanges since the rally we mentioned, so finding and trading it should be no challenge.
YooShi (YOOSHI)
Last but not least, did you not expect altcoins galore in this list? We cap it off with this BSC-based token inspired by Shiba Inu. Its volatility rate is one of the lowest among the assets we have reviewed: 15.63%.
YOOSHI’s trading volume is largely concentrated on a few centralized exchanges, leaving its liquidity much to be desired. On the other hand, it leads to a rather high degree of volatility in the shorter time frames – and if got this far, this must be what you are looking for!
Conclusion
When you are starting with short-term trading, a lot of its principles may seem counterintuitive in comparison to long-term strategies. However, this is also a way to earn money trading, so good luck to you if you stick to it!
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