How To Successfully Trade News In Crypto

Prominent crypto trader CryptoCred shared insights on how news influence market trends and how traders can take advantage of that.

What Happened: CryptoCred noted that the impact of news on the market tends to decrease over time, especially if it’s repetitive information. “Telegraphed news,”or news that is expected to happen, is priced more efficiently than unexpected events. Importantly, the market’s reaction to the news often provides more insight than the news itself.

News trading:

1. News generally has diminishing market impact over time, especially if it's the same piece of info (ETF flows, GBTC to Coinbase, German gov, Gox, SEC crusade, etc. – eventually gets stale and priced in).

2. Telegraphed news gets priced in more efficiently than…

— Cred (@CryptoCred) July 9, 2024

The trader also shared a rough blueprint for understanding market trends based on the absorption of good or bad news in bullish or bearish markets.

According to CryptoCred, bad news absorbed in a bullish market can signal a trend continuation. So does good news absorbed in a bearish market. Conversely, bad news absorbed in a bearish market and good news absorbed in a bullish market can signal a trend reversal.

Also Read: CPI Data, Jerome Powell, Ethereum ETFs: What Bitcoin Traders Are Watching This Week

Why It Matters: Crypto Cred’s insights highlight the importance of understanding market reactions to news events in predicting market trends. His observations work especially well if there's a clear preceding pattern.

For instance, a series of bad news leading to a downward trend, followed by bad news leading to an upward trend, could suggest a change in market direction.

This is particularly relevant for Bitcoin BTC/USD traders watching macroeconomic indicators and events as key trading variables.

Price Action: In the past 24 hours, BTC is trading 2.2% higher at $58,630.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next:

• What Technical Analysis Says About Bitcoin’s Latest Dump

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image created using artificial intelligence with Midjourney.