As we approach the cryptocurrencies’ peak of popularity, there are many new traders looking for a trading style that fits their capital and risk tolerance. So, during their research, most new traders wonder if is Dogecoin good for day trading? Yes, its unique community-driven volatility fueled by internet culture, viral memes, and endorsements from figures like Elon Musk creates rapid price swings, ideal for day traders who react quickly. DOGE's low transaction fees further enable frequent trades, maximizing profits in fast-paced market movements.
Dogecoin is the best choice for day trading, but the cryptocurrency market has plenty of other assets which are suitable for different trading styles and risk levels. All cryptos have their own traits, such as volatility, liquidity, and market depth, which will make them desirable for day traders. In 2024, the volume of some altcoins such as Ethereum (ETH), Solana (SOL), and Ripple (XRP) is high enough to support successful day trading, and because of heavy community and development influence, there are many price changes, day traders can profit from.
In this PlasBit article we will be discussing the common factors that make some coins the top cryptocurrencies for day trading. We also are going to discuss those features that will help traders make intelligent decisions and get the highest possible profit in ever-changing crypto markets. Furthermore, Traders who know what causes price swings can use this knowledge to increase their chances of successful day trading.
Top Cryptocurrencies for Day Trading in 2024
You may ask is dogecoin good for day trading? Yes it is one of the best choices for day trading but not the only one. This list highlights all the choices for best crypto for day trading in 2024, each offering unique characteristics that make them particularly suited for different trading strategies.
1. Dogecoin (DOGE)
Dogecoin, our choice for best crypto for day trading, is a coin that began as a joke and now is one of the most volatile assets, moving in price with social media trends and celebrities’ endorsements. And thanks to the community influence, it remains high profile and is popular with traders, particularly the day traders who closely follow social media trends. All these answer “yes” to is dogecoin good for day trading?
2. Bitcoin (BTC)
It is the cryptocurrency with the highest liquidity and market capitalization as of now, so naturally, it is one of the most popular currencies for day trading. And also it is known to set the trends for the whole market.
3. Ethereum (ETH)
Ethereum is a network with many decentralized applications and smart contracts, resulting in large daily trading volumes and wild swings in prices. Its frequent price swings mean that it offers lots of opportunities to cash in on short-term market movements. Unsurprisingly, Ethereum ranks as one of the top picks for those seeking profitable trades in the cryptocurrency market.
4. Solana (SOL)
One of the best cryptocurrency day traders on this list, Solana is a high-throughput blockchain with extremely low fees and high volatility. Additionally, Solana has high growth potential in its dApps and NFTs. Such characteristics make it an attractive choice for day traders.
5. Ripple (XRP)
Ripple is best known for its quick cross-border payments with low fees. The token also tends to have large price movements in reaction to news about partnerships or legal developments. Such a volatile nature creates a lot of profitable opportunities for day traders.
6. TONcoin (TON)
The official Toncoin token from Telegram is increasingly becoming the preferred day trade option. This is because TONcoin has many use cases on Telegram, such as payments for premium services, eSIMs, NFTs mechanisms, VPN services, and more. It is also a good choice for forward-looking traders, as this high number of app usage will increase Toncoin trading volume and turnover.
7. Binance Coin (BNB)
Being the native token of a cryptocurrency platform, BNB depends very much on the platform’s operation. Although it has high liquidity and a considerable trading volume, price fluctuations can often be fueled by developments or changes happening inside the platform. This can be both dangerous and lucrative for day traders.
8. Chainlink (LINK)
Chainlink is a decentralized oracle network that enables blockchain to securely interact with real-world off-chain data. As real-world data usage on blockchains rises, the price of Chainlink fluctuates due to high demand therefore, it is a good crypto for day trading.
9. Avalanche (AVAX)
Avalanche Known as one of the world's fastest decentralized solutions for applications and a direct competitor to Ethereum. The launch of its ecosystem and the new world that decentralized finance (DeFi) unlocks means its price is highly volatile. This makes it ideal for day traders who are looking for quick opportunities.
10. Cardano (ADA)
Cardano is marketed as a competitor to Ethereum and has an active development community, ensuring price movements on a regular basis. ADA is interesting to day traders, as it has high liquidity and it can be quite volatile with news-driven changes in the platform. It still offers more than enough trading opportunities, although it is not as volatile as some of the smaller tokens.
11. Polkadot (DOT)
Polkadot is built on the concept of blockchains working with one another. This real world use and its innovative way of interoperability makes the asset rather desirable. DOT is quite volatile, especially with its parachain auctions and ecosystem updates. Thus, this crypto is great for day traders who are trying to make profit on quick short-term movements in the market.
12. Polygon (MATIC)
Polygon is one of the most popular layer-2 scalability solutions for Ethereum and helps in increasing speed and reducing costs on transactions. Due to its important function of making Ethereum scalable and being used in DeFi and NFT platforms, it experiences high volatility, meaning day traders can find many profitable opportunities trading this token.
These cryptocurrencies all have their own strengths and weaknesses, and it's by studying these features that day traders are able to predict their particular price movements and take advantage of them.
What Makes a Token Good for Day Trading
When selecting a token for day trading, it's important to evaluate several factors that can impact the ease and profitability of your trades. Here are key characteristics to consider when determining the best crypto for day trading.
Fee Structure
Fees tend to pile up for day traders because they engage in multiple trades during the day. So day trading requires tokens with low transaction fees on the blockchain network, as well as within the exchange. This is especially true in markets with small price changes, as high fees can take a large part of the profits you make. There are also some native tokens that have small fee discounts, which give incentive to day traders to use them.
Market depth
Market depth has a large effect on whether or not you can day trade a token. Market depth stands for how many buy and sell orders there are at varying price levels available for a specific token. A higher market depth results in easier large trade execution, meaning traders can move huge sums of the token without substantially impacting its price. Tokens with less deep markets are more volatile when big trades occur, making them riskier and trickier for day traders to manage.
Development Activity
One of the other things that can change how good a token is for day trading is how active is the development behind it. Tokens with an active development team will fundamentally have more regular updates and improvements, which affects price movement and trust in the markets. Additionally, increased development activity helps build long-term confidence in the token, reducing the risk of sharp price collapses. Tokens with regular news and updates from their dev team often see more frequent price moves, offering better opportunities for day traders.
Security and Risk Management
For day traders, security is an important concern, as an exchange or token with vulnerabilities can mean the loss of your capital in a split second. Tokens traded on reputable, reliable exchanges have a lower risk of being hacked or experiencing a crash in price by getting delisted. Day traders should also choose platforms with risk management tools, such as stop-loss orders, to reduce their losses in volatile markets. By choosing a secure platform and token, day traders can have peace of mind and be more focused on trading.
Exchange Availability
The liquidity of a token largely depends on the number of exchanges listing it. It is more reliable when a token is listed on the best crypto exchanges because it means more people are likely familiar with it, and trading volume tends to increase. With higher trading volumes, spreads become thinner, allowing a trader to exit their trades with the least impact on price as possible. The availability of exchange listings also assists the day trader to identify opportunities across exchanges, increasing the probability for short-term gain.
Utility
How tokens are actually used in the real world determines how the market will trade those tokens. Tokens with proven utility, such as Ethereum for smart contracts or Chainlink for decentralized oracles, will probably have stable demand. However, the price of tokens with no real-world use is quite volatile as only a certain amount is traded in low volumes, making it difficult for traders to predict great opportunities. Moreover, utility-backed tokens can respond to news or events in their environment, causing profitable price fluctuations.
Volatility Index
The volatility index measures the intensity of price swings for 30 days yet to come. High volatility tokens are interesting for day traders as it gives them many different price movements to take advantage of. Yet, it also means higher risk, so it has two different sides because the token can move sharply upward or downward. Since the volatility index of a token is the key which traders understand whether or not a token fits their risk tolerance and strategy, it is very important for day traders to learn how to analyze it.
Considering all the features mentioned for the best crypto for day trading, we answer “Yes” to your question, “Is dogecoin good for day trading?”. An understanding of how each of these traits impacts trade provides traders with insight by which they can improve their odds of success as day traders.
Day Trading Strategies Explained
There are many different strategies that can help a trader make money and benefit from the movements of the market. They all have their own way of approaching the market and varying levels of complexity. Knowing what these strategies are is important in figuring out the best crypto for day trading because some strategies may work better with specific cryptocurrencies depending on how that crypto acts in the market. Here, we take a deeper look into common day trading strategies.
News Trading
News trading is an attempt to profit from the price movements that occur because of news events that affect a stock's price. Traders using this trading strategy want to buy or sell certain shares quickly by taking advantage of news announcements, hoping that the news will cause the market to move dramatically in one way. The trick here is speed and quickness, as the largest price changes normally originate in the initial minutes following a news release. This is an information-based strategy, requiring an investor to stay up to date with upcoming news events and then make a trade as soon as they are released.
Trend Following
Trend following means traders identify and invest in a market which trends either up or down. The traders who use this strategy do not try to predict where the market is going, but rather, once they see a trend, they hop on in order to profit from huge swings. The idea is to ride the trend and keep an eye open to know when a price trend starts weakening. This approach demands discipline, as holding onto a position too long or exiting the trade too early can result in missed opportunities or, worse, even losses.
Basket Trading
In basket trading, we deal with trading different stocks together. This is a common risk management strategy, spreading risk by buying many different assets so that you're not investing in just one stock. Traders can create custom baskets with any configuration they might want, for example, based on industry, risk level, or even market capitalization. This method seeks to capitalize on broader market movements while reducing the impact of individual stock’s volatility.
Gap Trading
GAP trading strategies focus on price gaps that occur between the close of one trading session and the opening of the next. Those who use this approach are on the hunt for stocks that open up with substantially different prices when compared to their closing price from the day prior, with the expectation that the price will eventually return to its original level, thus "filling" the gap. This strategy is a little complicated because it requires understanding why gaps happen and how they tend to change after the trading session opens.
Price Action Trading
Price action trading is based on understanding raw price movements and not employing aid from technical indicators. This means that traders using this method analyze the price movements on their own and interpret these movements themselves to attempt to locate high-probability price movements. This approach needs knowledge of market psychology and the ability to quickly react based on the observed changes in price.
Algorithmic Trading
Algorithmic trading refers to computer programs that execute trades based on pre-set and automated criteria, such as timing, price, or volume. Such programs are capable of processing large sets of data and making trades at higher speeds and frequencies than a human trader ever could. This method aims to make higher returns by using small price discrepancies and trends with the help of mathematical models running statistical analysis.
Each of these strategies caters to different trader types and objectives, from those capitalizing on news events for fast profits to those employing the systematic methods of algorithms or the psychological knowledge used in price action.
Risks of Altcoin Trading
There are some risks in trading altcoins, this is because their markets are really volatile, and also, there are many market manipulators. Moreover, because speculative trading drives a lot of trading in the crypto sector, altcoins can see radical price falls or increases within days.
This causes high volatility, which in the case of small coins is coupled with low liquidity, which means the coin does not have enough orders for traders to execute large transactions without moving the price of the coin up or down. What's more, there are also market manipulators who work as coordinated groups engaging in typical pump and dump schemes where they artificially inflate the price of an altcoin to sell at a profit, scamming other investors. Together, these features can make altcoins' market timing difficult to predict, leading to traders either buying high or being unable to sell during a downturn.
The altcoin market has many risks, such as new regulations or projects completely failing. This is because most altcoins are developed by companies with little or no track records, and they often fail to deliver on promises made regarding technology enhancements, distribution phases, or suggested business cases, which leads to complete failure. Furthermore, the landscape of regulation surrounding cryptocurrencies too is changing, and putting in place new heavy regulations would hurt the value of altcoins. In the worst cases, these factors can drop an altcoin’s price all the way to zero resulting in complete investment loss with no realistic means of recovery as investments for such projects are usually not insured or secured in any way. Therefore, the high profits of trading altcoins may be attractive, but they are also risky and need to be carefully evaluated. You should also plan risk management practices.
Identifying Scam Projects
To be able to choose the best crypto for day trading strategies yourself, the first step is to educate yourself about the cryptocurrencies and how you can tell if a cryptocurrency is reliable or not; this way, you can also check for scams. This knowledge also can be vital in protecting investments, especially in the crypto market. Here are key factors to consider when checking the credibility of a crypto project and red flags to watch out for.
What Makes a Coin Trustworthy?
Transparent Development Team
Reputable crypto projects usually have a clear, real-world team. Also, if they are high-profile developers and founders in that project they make it very reputable. A team without a face could be seen as a red flag, though not necessarily for privacy-focused projects.
Clear and Realistic Roadmap
A cryptocurrency project that is serious and reliable must have a roadmap, it must be detailed and realistic for planning the future of the project. A project that manages to fulfill the roadmap it has laid out for itself shows its community commitment, and by doing so, it increases its longevity.
Active and Engaged Community
Having a large, engaged community creates legitimacy. When there is engagement on social media platforms, as well as transparency in updates and regular communication from the staff, a healthy community can be maintained.
Technical Soundness and Innovation
Credible projects also should have strong underlying technology with a white paper that explains the project and its technological approaches. In some cases, if possible, a peer-reviewed report of the project's technology can also create legitimacy. Furthermore, projects that propose innovative solutions to the blockchain ecosystem will always be more credible.
Regulatory Compliance
If a crypto project follows regulatory standards and guidelines, this shows its reliability. This is because when a project is willing to comply with the law, it shows that the project is ready to function under laws that are made to protect investors from scams and price manipulation schemes.
How to Spot a Scam Crypto Project?
Unrealistic Promises
Beware of deals that sound too good to be true. High returns are, of course, risky by nature in every investment sector. So, any project that guarantees consistently high profits without any risk should be looked at with suspicion.
Lack of Transparency
If it’s difficult to find specific details about the project, team, or technology, this lack of clarity could signal a bigger problem. Scam projects often have no or bare-minimum information and sometimes even fake team members.
Heavy Marketing Focus
Marketing is key for any project, but if marketing seems to receive more resources than product development altogether, it could be a red flag. Beware projects that spend most of their energy on acquiring new investors and not on developing their technology and delivering on their roadmap.
High-Pressure Sales Tactics
Any project that is pressuring you, often with claims of limited-time offers to get rich quickly, should be looked at with caution because making you feel panic and urgency is a very typical scam tactic.
Large Pre-Mine or Founder's Share
An unequal token distribution, where most of the tokens belong to the project founders or a few early investors, suggests that there is a risk pump-and-dump operation. A fair and particularly well-spread token distribution is, in most instances, a sign of reliability.
Lack of Listing on Reputable Exchanges
Do not trust projects that are not listed on a solid, credible cryptocurrency exchange. The vetting on these platforms can act as an extra layer of protection against scams.
Studying a project properly and without time pressure before investing will save you from many scams. Furthermore participating in online communities and reading user experiences can help you find reliable projects.
Day Trading vs. HODLing Bitcoin
Day trading and HODLing (holding) show two opposite sides in the cryptocurrency trading strategies. Participation in day trading that is, buying and selling Bitcoin within the same day in an attempt to profit from short-term price changes. Using this approach, you will need to have a good awareness of market trends and technical analysis and also be quick to act on the way the markets are moving. However, this practice is very risky because day traders need to constantly monitor the market since Bitcoin tends to be volatile, and there is virtually no room for making a mistake. Based on our research in PlasBit, this strategy works better for skilled and active traders, but it could lead to losses for someone who is just starting out.
Simply put, HODLing Bitcoin is the practice of buying and holding onto the cryptocurrency for long periods in a bet that it will increase in value over time. This method is much less time consuming when compared to day trading. When using this strategy, you bet on the historical upward price movement of Bitcoin. This is why you need patience and self-control to successfully profit from this method. This method also usually comes with less pressure and stress for HODLers since they are less affected by short-term market volatility. Furthermore, when compared to day trading, you save on transaction costs using this strategy. Both strategies have their pros and cons, and it's all dependent on your investment goals, risk tolerance, as well as how active you want to be in managing your holdings of cryptocurrencies.
Conclusion
In this PlasBit article, we answered "yes" to the question, "Is Dogecoin good for day trading?" due to its significant volatility and the influence of a robust, community-driven market. We also covered some of the most essential tips to support traders stepping into the crypto day trading world. We looked at various types of strategies to trade, and how each type is suited for different kinds of traders. We also took a look at the risks of trading altcoins, with the main focus being the importance of volatility and liquidity. We also discussed the importance of risk management and covered how to do due diligence before investing in crypto projects. We made sure that every part will offer you some key information to succeed within the complicated and multilayered adventure of day trading.
However, day trading is not easy and not everyone knows the answer to what strategy or coin would be the best. All in all, each trader has to find their own way based on strengths, risk preferences, and market situations. Day trading is really about recognizing how the market functions and why it changes, and as a trader, you need to recognize subtle changes in market direction. So what method you employ will largely depend on personal preference and the cryptocurrencies being traded.
