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Author: Admin | 2025-04-28
Buying low and selling high is the most vanilla BTC trading strategy ever. But what if we told you that there is another way around it? You can first sell BTC high and then buy BTC low. Simply put, you can short bitcoin.Shorting a crypto asset means that traders expect the same to go down in time, maybe even crash. And while buying and selling bitcoins is a tried and tested approach, shorting bitcoins is a good way to use a dipping market to your advantage. Still, not every trader likes shorting. However, in 2022, when most cryptos have retraced a lot from their all-time highs, betting on specific assets to go down isn’t such a bad option.Then again, there is much more to shorting or short selling than what meets the eye. Stay with us as we discuss everything about short-selling BTC throughout this discussion.In this guide:What is shorting bitcoin?How does shorting bitcoin work?Benefits of shorting bitcoinLoss hedgingBeating the volatilityBetter valuationLow capital requirementShorting bitcoin: the risks involvedLimitless lossesMargin interestWays to short bitcoin: here are 6 of them1. Margin trading2. Futures market3. Binary options trading4. Inverse ETPs5. Bitcoin CFDs6. Standard short-selling bitcoin assetsTools/strategies for short-selling bitcoinTechnical analysis1. RSI2. Bollinger bands3. MAs4. Standard deviation5. ADXSentiment analysisFundamental analysisHow to short bitcoin?The long and “short” of BTC shortingFrequently asked questionsWhat is shorting bitcoin?Shorting bitcoins means selling BTC at a specific price — market or limit — and eventually buying the same at a lower price. The buy low-sell high concept still holds but in reverse. Short selling is an investment strategy where the trader expects BTC prices to go down but still wants to profit from it. Furthermore, shorting is a common investment method in the traditional asset markets. Its popularity in the crypto space can be attributed to the volatility surrounding the realm.Simply put, more volatility means more shorting opportunities.How does shorting bitcoin work?Shorting, as an investment principle, is no different for bitcoin. It applies to any and every tradable asset. However, with crypto being the focal point of this discussion and BTC being the most dominant crypto, this discussion requires additional detailing.If you are looking to short-sell bitcoin, you must first borrow BTC from the relevant platforms to open a short position. Borrowing in this context is termed “margin.” Once you have the borrowed BTC on you, consider selling it at a price and buying it back later — closing the
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