So, Bitcoin value has fallen 10 % since yesterday, after we had market growth beyond all expectation (and logic if I may add) in the previous couple of days. I assure you there is no reason to panic. Closer look reveals who stands behind it –<a href="https://www.cryptoknowmics.com/crypto/altcoin-arbitrage-today-xlm-eth-ltc-usdt-zec-trx/"> exchanges</a>. What is the reason, you may ask? High number of short bids on Bitcoin price.

Short is more or less a bet that some share or asset price will going to fall. If there is a high number of short bids and the price really falls, exchanges are in trouble. They would have to suffer a big loss paying all traders who placed bid on short. That’s when the market manipulation called short squeeze comes into play. Exchanges invest in pumping the coin price until number of short bids falls and it’s safe again to decrease the price of said coin.

<img class="alignnone wp-image-116874 size-full" src="https://www.cryptoknowmics.com/crypto/wp-content/uploads/2019/05/Trade-Bitcoin-1.jpg" alt="" width="1428" height="941" /> This was a small bonus trading tip, you could use at your own discretion. Don’t forget to take into consideration the whales (owners of large percentage of coins currently in use) who could decide to outplay exchanges. Now, to get to the main theme of this article – how to legally crack the system and diminish risks involved with cryptocurrency trading.

In asset trading, there are two possible scenarios: price could go up or it can go down. There is no third option. If you can place bet on both options there is no guarantee you will win, but there is also no risk you will lose.

BitMex (<a href="https://www.bitmex.com">https://www.bitmex.com</a> ) is cryptocurrency trading platform which allows use of leverage. If you are interested in checking out BitMEX but do not wish to put your BTC at risk by trading, you can try out the BitMex testnet (<a href="https://testnet.bitmex.com">https://testnet.bitmex.com</a> ) to see how the platform functions. While BitMEX allows traders to speculate on the price movements of a variety of cryptocurrencies, all deposits and withdrawals on BitMEX are done through Bitcoin only. 

   BitMEX (Bitcoin Mercantile Exchange) is a derivatives exchange, which offers leveraged trading on cryptocurrency-based instruments. Some knowledge of traditional features and options will be required before you can fully understand the trading environment.

The company behind BitMEX is called HDR Global Trading Limited. It is registered on the Seychelles, which generally does not inspire a lot of trust. That being said, little to no regulation is applied to the crypto-space in most jurisdictions. Most exchanges earn their credibility by word of mouth, slowly.

From its foundation in 2014 until now, BitMEX has not experienced any major hack. This is always a positive sign, although not a guarantee for future stability. The user reviews on BitMEX are not that many, given the fact this is a relatively complicated exchange. However, there are virtually no complaints about the company’s service.

BitMex offers very interesting trading instruments, which you can explore, I will focus on leverage. A maximum leverage of 1:100 is available, this comes at a price, which is charged once every 8 hours. But, BitMEX has a neat feature which is the fact that you can change your leverage, per position. In effect, this allows you to place a maximum loss, after which your single position will be liquidated. With forex brokers, your entire account serves as a guarantee for all of your positions.

BitMEX allows trading through a web-based platform, while the charting functionality is provided by TradingView.

<img class="alignnone wp-image-116875 size-full" src="https://www.cryptoknowmics.com/crypto/wp-content/uploads/2019/05/Trade-Bitcoin-2.jpg" alt="" width="1338" height="652" />

The top portion allows switching between the different products, while the order placement module provides a vertically arranged order book. BitMEX has been integrated with two of the leading futures trading platforms, Ninja Trader and Sierra. Keep in mind these may not be that friendly towards beginners and using them usually comes with a monthly fee.

BitMex allows you to trade future contracts of some important cryptocurrencies like Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Cardano, and Ripple. Trading future contracts means you can make money by shorting (selling) or longing (buying) positions on the price of those cryptocurrencies. If you bet for bot short and long positions at the same time and with the same price – you could make nice profit if one of the positions goes up.

If you use 10x leverage, it means you are investing 10 times the money you are using but you will lose it if the price moves 10% in opposite direction to the one you are investing (10% with a 10x leverage is 100% which is the percentage of your original investment).

The important part is that BitMex doesn’t have restrictions about opening more than one account, so you open two. Then you will need at least 20$ in bitcoin on your wallet to finance both accounts with 10$ each. When you do that, you open positions in both accounts at the same time with 10X leverage, first to long and second to short. And the last step is to set close position on short one copying liquidation position from the long one. If price falls both positions will close, you will lose money from the first account but regain the same amount from the second one. The magic happens when price grows, but you should check trading position every day and make a trading analysis to avoid losing your gains by not closing on time.

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How to use arbitrage betting to trade Bitcoin

Born in Meissen, Germany in the winter of 1984, Constantine is currently living in Belgrade, Serbia. He lived in many different places all over the world and worked many different jobs which includes: Java development, short stories writing and history teaching. He has keen interest in cryptocurrency since 2012.

How to use arbitrage betting to trade Bitcoin

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