Portfolio rebalancing is related to adjusting the weightings of different assets within a Cryptocurrency trader’s portfolio.
LONDON, UNITED KINGDOM, July 4, 2022 /EINPresswire.com/ — Cryptocurrency traders have been rebalancing their wallets by using moving averages to define which coins are trading in an uptrend. These coins are bought periodically by crypto traders and can be sold automatically due to underperformance. When the price of a coin is higher than a medium-term moving average, that signals that the coin is trading in an uptrend. Given the current state of the market within the past month, cryptocurrency traders have maximised the use of this trading strategy to rebalance their crypto wallets accordingly, by selling underperforming coins and investing the proceeds in the coins on-trend.
Co-founder of Coinrule, Oleg Giberstein thinks crypto is experiencing the same stresses as other parts of the economy, leading to a fall in prices, however, he believes crypto traders can take advantage of this using Coinrule. He said: “Crypto markets trade 24/7 and reacting at any price move is challenging. This strategy makes it easy to rebalance the coins in your wallet in a bull or bear market, taking advantage of the daily volatility.”
He adds: “How many times every day do crypto traders check the prices of their coins? Each price increase tempts you to sell to take some profit. On the other hand, you tend to stick with those coins underperforming, hoping that they will rebound soon. The reality is that during a bull market, the best strategy is to follow the trend. As price moves quickly at any time of the day, it’s virtually impossible to catch up with all the market opportunities. The rebalancing strategy is the perfect auto-pilot for your wallet in a bull market.”
Cryptocurrency traders have particularly increased their use of this strategy ( https://coinrule.com/crypto-trading-bots/rebalance/ ) within the past month as there are two advantages of using such an approach. Firstly, the strategy is not that demanding in terms of capital to invest. This makes it easier to have available capital for other live strategies. Where a trader selects the same wallet across all the actions, rebalancing occurs with no need for additional capital apart from the coins traded. A small amount of capital is only required to make sure the rule has enough funds to buy back the coins sold in the previous rebalancing action.
Another interesting advantage for crypto traders with this strategy is that they avoid adding undesired coins to their wallets. Crypto traders decide which coins to hold. The strategy only adjusts the amounts based on the market volatility to optimise portfolio returns. On the contrary, if a crypto trader wants to exploit even more opportunities, this strategy can run in parallel with other algorithmic rules. For example, cryptocurrency traders can accumulate their favourite coins and let this strategy rebalance them automatically in their crypto wallets.
Cryptocurrency traders can use the rebalancing strategy today to automate investments on their favourite exchanges with Coinrule’s automated trading bots https://coinrule.com/crypto-trading-bots/