Bitcoin Trading Strategies: What 8 Years of BTC Trading Taught Me

I bought my first Bitcoin in 2017.

Sold it a week later for a 30% profit. Felt like a genius.

Then watched it go up another 500%. Felt like an idiot.

That was my first lesson in Bitcoin trading: this asset doesn't play by normal rules.

Why Bitcoin Is Different

Let me explain what makes BTC unique.

Volatility on steroids. A 10% move in stocks is a crash. In Bitcoin, it's Tuesday. I've seen 30% swings in 24 hours. Multiple times.

24/7 markets. No closing bell. No weekends off. The market never sleeps. Neither did I, for a while.

Narrative-driven. Bitcoin moves on stories. Halving cycles. Institutional adoption. Regulatory news. The fundamentals matter, but the narrative matters more.

Whale-dominated. A few large holders can move the market. Those suspicious wicks? Often whale games.

Correlated to everything and nothing. Sometimes BTC follows stocks. Sometimes it leads. Sometimes it does its own thing entirely.

The Bitcoin Cycles

If you're trading Bitcoin, you need to understand the cycles.

Bull market: Everything goes up. Your strategy doesn't matter much. You make money.

Bear market: Everything goes down. Your strategy matters a lot. Most people lose money.

Accumulation: Boring sideways action. Smart money is buying. Retail is bored.

Distribution: Exciting tops. Smart money is selling. Retail is buying.

The key insight: different strategies work in different phases.

Momentum trading works in bull markets. Mean reversion works in ranges. Nothing works well in distribution—that's when you should be reducing risk.

My Bitcoin Trading Strategies

Strategy 1: The Halving Cycle Trade

This is the big picture trade.

Bitcoin halving happens every ~4 years. Historically, price bottoms about a year before halving and peaks about a year after.

The strategy:

1. Accumulate during bear market (12-18 months before halving)
2. Hold through halving
3. Start taking profits 6-12 months after halving
4. Be mostly out before the blow-off top

This isn't day trading. It's positioning for the macro cycle.

Strategy 2: The Support Bounce

For shorter-term trades, I focus on key support levels.

Bitcoin respects round numbers and previous highs/lows. $50K, $60K, $100K—these levels matter.

Setup:

1. Identify major support (previous high, round number, high-volume node)
2. Wait for price to test support
3. Look for rejection candle (long lower wick, bullish engulfing)
4. Enter with stop below support
5. Target: previous resistance

I automate this with dashpull. Price at support + rejection candle + volume confirmation = enter.

Strategy 3: The Funding Rate Fade

This is specific to Bitcoin perpetual futures.

When funding is extremely positive (>0.1%), everyone's long. The market is overcrowded.

When funding is extremely negative (<-0.05%), everyone's short. Squeeze incoming.

I fade the extremes:

• High funding + resistance = look for shorts
• Low funding + support = look for longs

Not a standalone strategy, but a powerful filter.

Bitcoin-Specific Indicators

Some indicators work better for Bitcoin than others.

On-Chain Metrics

Bitcoin is transparent. You can see what's happening on-chain.

• Exchange flows: Coins moving to exchanges = selling pressure. Coins leaving = accumulation.
• Whale wallets: What are the big holders doing?
• MVRV ratio: Is Bitcoin overvalued or undervalued relative to realized value?

I don't trade purely on on-chain data, but I use it for context.

Funding Rates

Already mentioned, but worth emphasizing. Funding rates show market positioning. Extremes often precede reversals.

Open Interest

Rising open interest + rising price = new money entering longs. Bullish. Rising open interest + falling price = new money entering shorts. Bearish. Falling open interest = positions closing. Trend might be exhausting.

The Bitcoin Volatility Problem

Here's the challenge with Bitcoin:

Normal stops get hunted.

Bitcoin loves to wick through obvious levels, trigger stops, then reverse. It's frustrating. It's also predictable.

My solution:

1. Use wider stops than you think you need
2. Size positions smaller to accommodate wider stops
3. Wait for the wick to happen before entering

That last one is key. I often wait for the "stop hunt" before entering. Let the weak hands get shaken out first.

Bitcoin Risk Management

Standard risk management, but stricter.

Position sizing: Never more than 2-3% of portfolio in a single BTC trade. The volatility is too high for larger positions.

Stop losses: Always. No exceptions. Bitcoin can drop 20% in hours.

Take profits: Scale out. Don't try to catch the exact top. Take some off at each target.

Leverage: Maximum 3x for Bitcoin. I've seen too many people get liquidated on 10x+ positions.

Common Bitcoin Trading Mistakes

Mistake 1: Overleveraging

"Bitcoin is volatile, so I'll use 20x leverage for bigger gains!"

Bitcoin is volatile, so 20x leverage will liquidate you in minutes.

Low leverage or no leverage. Seriously.

Mistake 2: Trading Against the Trend

In a bull market, every dip looks like the top. It's not. In a bear market, every bounce looks like the bottom. It's not.

Trade with the trend. Don't try to be a hero.

Mistake 3: Ignoring the Macro

Bitcoin doesn't exist in a vacuum. Fed policy, dollar strength, risk appetite—these all affect BTC.

When the macro is risk-off, Bitcoin usually suffers. Don't fight it.

Mistake 4: FOMO Buying Pumps

"It's going up! I need to get in!"

By the time you see the pump on Twitter, you're late. You're the exit liquidity.

Wait for pullbacks. Always.

Bitcoin and Altcoins

Quick note on the relationship:

When BTC pumps: Altcoins often lag, then catch up. When BTC dumps: Altcoins dump harder. Much harder. When BTC consolidates: Altcoins can have their own moves.

I always check what Bitcoin is doing before trading any altcoin. If BTC looks weak, I'm not going long on alts.

Automating Bitcoin Trades

Here's how I use dashpull for Bitcoin.

Long setup:

• Price within 2% of major support
• Funding rate below 0.05%
• Bullish rejection candle
• Volume spike

Short setup:

• Price within 2% of major resistance
• Funding rate above 0.1%
• Bearish rejection candle
• Volume spike

The system monitors 24/7. Bitcoin doesn't sleep, but I do. The conditional orders watch while I rest.

The Bottom Line

Bitcoin trading is not for the faint of heart. The volatility is extreme. The manipulation is real. The emotions are intense.

But for those who understand the game, the opportunities are unmatched.

The keys:

• Understand the macro cycles
• Trade with the trend
• Use wider stops, smaller size
• Watch funding rates and on-chain data
• Never overleverage

dashpull helps me trade Bitcoin systematically. Conditions defined. Execution automated. Emotions removed.

The market never sleeps. My conditional orders don't either.

Ready to automate your Bitcoin strategy? Try dashpull →