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Dive deep with us as we explore the first CEX-initiated research on user trading behavior using Bybit’s proprietary data. Discover valuable insights into how users adapt their trading strategies in both bull and bear markets.
Our research covers 3 main questions:
- How is market volatility impacting the use of leverage?
- How is the trading frequency impacted amidst ups and downs?
- How is copy trading assisting users in the bull and bear markets?
Discover the valuable insights gained from observing the behavior changes of institutions, VIPs, and retail users. Compare their trading behavior to your own and gain a better understanding of how professionals and institutions maneuver through market volatility.
It is surprising to note that traders tend to engage in more spot trading when prices experience rapid increases and decreases. This behavior can be explained by the tendency of retail users to invest in altcoins during a bullish market.
Leverage is commonly utilized by futures traders with loss aversion bias may explaining why traders increase leverage in a bull market while decreasing it in a bear market. However, it is important to exercise caution when adding leverage during a market rebound, as this can result in unpredictable swings in portfolio balance.
Most users tend to have BTC, ETH, or blue chip tokens as the mainstay of their portfolio, with their investments into altcoins varying as the market goes through its ups and downs. New crypto users are advised to follow this portfolio allocation advice to build their portfolio from scratch.
One main takeaway is how Institutions tend to be unswayed by market fluctuations and choose to hodl their assets. Without professional training, it is advisable for novice traders to avoid frequently adjusting their leverage. Instead, copy trading presents a valuable opportunity for emerging crypto traders to diversify their risks and returns.
The recent increase in trading frequency is a positive sign for trading sentiment compared to the latter half of 2022. Despite the weak BTC price in the past weeks, users still have their hope up for a spot BTC ETF.
Copy trading offers a unique advantage to traders for many reasons. Findings show that it has minimal correlation with broader market trends. Indicating that by engaging in copy trading, users have the opportunity to diversify their trading risks effectively.
Find out more and begin your copy trading journey here!
As one of the leading crypto exchanges, Bybit takes pride in revolutionizing your trading experiences. Our trading tools, such as copy trading and the recently upgraded UTA suite, will continue to evolve. Discover more about UTA and copy trading here!
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