Day trading in crypto is when traders rely on short-term, intraday price fluctuations to buy and sell tokens to generate profits. Traders are connected to the market every day and try to spot small inefficiencies that require data-driven insights and trading knowledge. In this article, we explored what day trading crypto is and provided a detailed overview of how it works.
- What is day trading crypto
- How does day trading in crypto work
- Is crypto day trading different than swing trading
- Can you learn how to day trade crypto?
- What Indicators to Use for Cryptocurrency Day Trading
- What should traders look for when day trading
- Common Strategies for Day Trading in Crypto
- Crypto investing for retail traders
- FAQ
What is day trading crypto
Day trading in crypto is an investment strategy in which traders buy and sell digital assets on the same day. Traders analyze the market, look for short-term price inefficiencies, and aim to get in at the right time to benefit from upward or downward movement. While long-term traders analyze the market at the macro level, day traders focus on charts and other indicators throughout the day.
Day trading is often seen as a high-risk strategy, especially for new or inexperienced traders. As we analyzed, 40% of most day traders in crypto give up in the first three months because they rely on patterns rather than long-term perceived value.
By closing all positions before the market “closes” (or within a specific 24-hour window, given crypto never sleeps), traders avoid “overnight risk”—the danger that prices will shift unfavorably while they are asleep or away from their screens. This strategy relies heavily on technical analysis and chart patterns rather than on a project’s long-term fundamental value.
While the concept is borrowed from traditional stock markets, crypto day trading is distinct because of the market’s unique characteristics: extreme volatility and 24/7 accessibility.
How does day trading in crypto work
Crypto traders use day trading by opening and closing long or short positions quickly rather than holding them for more than a day. On average, a trader keeps positions open for minutes or hours to allow their hypothesis to play out. The process is similar to any trade, where users can place limit orders or buy at market price.
In day trading, since price fluctuations are smaller, leverage is used to achieve a higher win percentage on small price movements. Since crypto operates around the clock, traders have multiple opportunities to use charts to spot patterns, identify trends, and see where volume spikes are occurring.
With similar volatility but higher risk due to greater leverage, traders rely on stop losses to manage their risk. While leverage increases potential returns, it also significantly raises the risk profile.
How is day trading crypto vs stocks
There are differences between trading stocks and trading crypto: stock markets are open during business hours and are location-specific. This means traders can only day trade the US markets during the market’s opening time. Crypto, on the other hand, is 24/7 and not location-bound.
Another difference is that, since crypto is a new asset class, the market is more volatile. This is also due to the lack of market regulation and lower liquidity than in the stock market. Stocks, however, have less volatility, and while 5-10% price swings in a day are normal in crypto, they aren’t in the stock market.
Finally, crypto has lower entry barriers compared to stocks and less regulation. A traditional brokerage account for day trading requires additional information, KYC requirements, and more stringent access guidelines.
Is crypto day trading different than swing trading
Yes, day trading and swing trading differ in the time frame for a trade to close. Day traders open and close multiple trades in a single day with higher leverage and more risk. Swing trades, as we explored in one of our articles, are held for days or weeks. They use different indicators at times and want to capture larger macro-movements rather than quick entries.
Can you learn how to day trade crypto?
Yes, day trading is a skill that can be learned through studying, practice, and discipline. Aspiring traders can start by learning the basics, such as reading candlestick patterns and understanding support and resistance levels. To succeed at day trading crypto, a trader needs a good grasp of technical analysis and must know how to manage risk when entering trades.
Since theory needs to be applied, users can open demo accounts to practice what they’ve learned in a real-world environment. This approach limits risk while helping users understand how markets work. Finally, proper risk management must be implemented in both demo and live trading accounts to avoid depleting a portfolio’s balance.
What are the best day trading crypto coins
When selecting cryptocurrencies for day trading, not all coins are equally suitable. Ideal assets have high liquidity, which allows traders to enter and exit positions quickly without significant price slippage, and some level of volatility, which creates profit opportunities. For 2026, Top 10 cryptocurrencies like Bitcoin or Ethereum offer high liquidity and are considered safer despite having lower relative volatility than altcoins. Solana is another favorite among active traders due to its high speed and volatility.
What Indicators to Use for Cryptocurrency Day Trading
Technical indicators help traders make data-driven decisions. While there are hundreds available, successful traders often stick to a core few:
Relative Strength Index (RSI): Measures the speed and change of price movements. An RSI above 70 suggests an asset is overbought (time to sell?), while below 30 suggests it is oversold (time to buy?).
Moving Averages (MA): Smooths out price data to identify the trend direction. A common strategy involves watching for crossovers between short-term (e.g., 9-day) and long-term (e.g., 50-day) moving averages.
Volume: Confirms the strength of a trend. A price increase accompanied by high volume is a strong bullish signal.
What should traders look for when day trading
Day traders look beyond technical analysis and price action and also rely on news and market sentiment when trading. Volume is one of the most important indicators, as high volume allows for quick execution and also shows where order books are seeing increased activity.
Additionally, daily news can trigger volatility spikes. Crypto is highly responsive to news, and announcements regarding regulation, hacks, liquidations, or similar events can trigger upside or downside volatility.
Market sentiment plays a role in how the market acts. In a bullish market, a price drop is a slight correction that can be bought up or longed, while in a bear market, it’s a sign of a structural change. Each of these elements contributes to how traders open their positions. For a day trader to be successful, he needs to achieve a 1.5 win-to-loss ratio.
Common Strategies for Day Trading in Crypto
Day traders are driven by data and patterns, which leads them to be profitable. They follow strategies that can maximize their chances of success.
A preferred crypto trading strategy is scalping, a high-frequency approach in which traders make dozens or even hundreds of trades daily, targeting small price fluctuations and holding positions for just seconds or minutes. It relies on candlestick patterns that help signal entry points.
Another method is range trading, which involves identifying a price range where an asset consistently bounces between a support level (the floor) and a resistance level (the ceiling). Traders buy at support and sell at resistance to capitalize on these predictable movements.
Breakout trading in crypto focuses on waiting for the price to break through key support or resistance levels with high volume, often signaling the beginning of a strong new trend. By using these strategies, traders aim to make calculated decisions and optimize their returns.
Crypto investing for retail traders
Day trading for retail investors might sound easy, but it’s an extremely complex way of investing. That’s why only 10-15% of day traders are actually profitable: most regular traders seek high returns and don’t know how to manage their risk, which pushes them out of the market.
If you can’t handle day trading or don’t have the time to monitor markets or follow strategies consistently, Yieldfund provides access to crypto investment through investment plans that generate up to 60% yearly returns and weekly payouts.
FAQ
How to withdraw profits from crypto day trading platforms in Europe?
To withdraw trading profits from European exchanges, you can convert crypto profits into Euros and withdraw them to your linked bank account. You need to have your bank card or IBAN linked to withdraw funds.
How to open a crypto day trading account in the Netherlands?
To open a crypto account in the Netherlands, pick a DNB-registered exchange, register, complete KYC with ID and proof of address, and deposit funds via iDEAL.
How to start day trading cryptocurrencies with low fees?
We found that to minimize fees when day trading with limited funds, you need to use limit orders to benefit from lower “Maker” fees on Maker-Taker exchanges. Pay fees with exchange tokens (e.g., BNB, BGB) for discounts, and choose low-fee platforms like Bybit or OKX for competitive rates.
Is it legal to day trade crypto in the Netherlands?
Yes, day trading crypto is legal in the Netherlands. You must report your profits and losses under “Box 3” when filing your annual income tax return. Active day trading could potentially be classified as “Box 1.”
