Day trading cryptocurrencies has become a popular way for traders to take advantage of the fast-paced and volatile nature of the crypto market. However, with thousands of cryptocurrencies available, choosing the best crypto to day trade can be a daunting task.
In this article, we will analyze the top choices for traders looking to engage in crypto day trading. We'll consider factors such as liquidity, volatility, trading volume, and overall market demand to identify the most promising options.
Key highlights:
- Day trading cryptocurrencies leverages the market's volatility and liquidity for profit opportunities, but selecting the right crypto is critical.
- Important factors for choosing a day-trading cryptocurrency include high liquidity, substantial trading volume, and market depth.
- Stablecoins like Tether and USDC are vital for efficient value transfer between coins and exchanges in day trading.
- Bitcoin and Ethereum are preferred for conservative day trading due to their stability, while Dogecoin suits high-risk, high-reward strategies.
How to selectthe best cryptos for day trading
There is no silver bullet when it comes to selecting the best day trading crypto coins. However, it’s generally accepted that there are certain properties that make a cryptocurrency a good digital asset to day trade – these include:
- Volatility: Can be beneficial for day traders as rapid price fluctuations offer more opportunities for buying and selling.Higher volatility can provide more trading opportunities but also increases the risk.
- Liquidity: Highly liquid crypto assets allow for faster execution of trades and tighter bid-ask spreads.It's generally recommended to choose cryptocurrencies with sufficient liquidity for day trading.
- Trading volume: Higher trading volume indicates more active market participation, making it easier to enter and exit trades quickly. Adequate trading volume is essential for efficient day trading.
- Market depth: A deeper market indicates a more liquid and active market, allowing for larger trade sizes without significantly affecting prices and slippage risks.
- Exchange availability: A cryptocurrency being available on as many exchanges as possible means higher volume, which is a major plus for day traders.
- Market cap: An established crypto is safer to trade and less likely to suddenly plunge in value than low market cap coins. However, lower market cap coins can be a good option for traders who don't want very risky trades.
With these factors in mind, let’s examine our top cryptocurrency day trading picks based on the above criteria.
| Cryptocurrency | Market Cap | Avg. Daily Volume (Feb. ‘24) | Total Volume (Feb. ‘24)* | 30-day volatility | Exchange listings |
|---|---|---|---|---|---|
| Bitcoin | $1.12 trillion | $38.05 billion | $989 billion | 8.4% | 145 |
| Ethereum | $392 billion | $15.99 billion | $416 billion | 10.7% | 138 |
| XRP | $30.8 billion | $1.68 billion | $43.7 billion | 3.7% | 117 |
| Solana | $48.3 billion | $4.60 billion | $121 billion | 5.7% | 92 |
| Dogecoin | $13.8 billion | $783 million | $20.4 billion | 3.4% | 105 |
| BNB | $59.0 billion | $1.51 billion | $38.5 billion | 8.9% | 93 |
| Litecoin | $5.5 billion | $571 million | $14.8 billion | 2.0% | 118 |
| Avalanche | $14.8 billion | $865 million | $22.5 billion | 6.3% | 81 |
Data collected on February 27, 2024. *Includes data from 1st to 26th Feb.
It is worth noting that having access to liquidity via stablecoins is very important for anyone who wants to day trade, as they allow quick transfer of value between various coins and exchanges. The two most popular stablecoins in terms of trading volume last month were Tether and USDC.
The 7 best cryptos to day trade: Examining the best coins for day trading
What are the best cryptos to trade with high frequency depends on your preference. If you prefer high-risk, high-reward trades, then choosing the most volatile crypto for day trading, such as Dogecoin, might be a good choice for you. If you prefer a more conservative approach, then coins that are more stable, like Bitcoin and Ethereum, will serve you better. Consult the sections below to find the right day trading cryptocurrency for you.
If you're looking to get into crypto day trading, it's important to choose a trading platform with high liquidity and low trading fees. Make sure to check out our list of the best crypto exchanges for day trading to learn more.
1. Bitcoin (BTC)
Average daily volume in November 2023: $38.05 billion
30-day volatility: 8.4%
Bitcoin, the pioneering cryptocurrency, remains the go-to choice for many day traders. It boasts high liquidity, large trading volumes, and a well-established market. Bitcoin's price movements can be highly volatile, providing ample opportunities for day traders to profit from short-term price fluctuations. Additionally, the availability of Bitcoin trading pairs on most exchanges makes it easily accessible for day trading strategies.
2. Ethereum (ETH)
Average daily volume in November 2023: $15.99 billion
30-day volatility: 10.7%
Ethereum, the second-largest cryptocurrency by market capitalization, is another top choice for day traders. Known for its smart contract functionality, Ethereum offers a wide range of trading opportunities. The cryptocurrency has a robust ecosystem with numerous decentralized applications (DApps) and tokens built on its blockchain, resulting in high trading volumes and liquidity. Ethereum's price movements often exhibit significant volatility, making it attractive for day trading strategies.
3. XRP (XRP)
Average daily volume in November 2023:$1.68 billion
30-day volatility: 3.7%
XRP, known for its fast and low-cost cross-border payment solutions, has established itself as one of the top cryptocurrencies for day trading. The cryptocurrency has a large market cap and is widely supported on major exchanges. XRP's price movements can be influenced by various partnerships and collaborations, creating potential opportunities for day traders to capitalize on short-term price fluctuations.
4. Solana (SOL)
Average daily volume in November 2023: $4.60 billion
30-day volatility: 5.7%
Solana is a highly efficientblockchain platform with the capability to execute smart contracts. Since its introduction n 2020, Solana has gradually established itself as a serious to Ethereum in the realm of smart contracts. Solana integrates the Proof-of-Stake consensus mechanism combination with pioneering features like Proof-of-History, which allow it to efficiently process thousands of transactions per second while simultaneously maintaining low costs for users.
Solana is one of the most widely adopted blockchain platforms and is seeing usage across diverse sector, ranging from decentralized finance and stablecoins to NFTs and blockchain gaming.
5. Dogecoin (DOGE)
Average daily volume in November 2023: $783 million
30-day volatility: 3.4%
Despite starting as a meme coin, Dogecoin has established itself as a prominent cryptocurrency for day trading. Its high volatility and active trading community have led to frequent price fluctuations, presenting opportunities for traders to profit from short-term price movements. The dog meme-inspired cryptocurrency has had plenty of ups and downs in the past, plenty of which connected to Elon Musk and his fascination with DOGE.
6. BNB (BNB)
Average daily volume in November 2023: $1.51 billion
30-day volatility: 8.9%
As the native cryptocurrency of Binance, one of the best crypto exchanges, BNB has gained considerable popularity among day traders. BNB offers various benefits, including reduced trading fees and participation in token sales on the Binance Launchpad platform. With the increasing adoption of Binance and its ecosystem, BNB has seen significant growth in trading volume and liquidity, providing traders with ample opportunities for day trading.
7. Litecoin (LTC)
Average daily volume in November 2023: $571 million
30-day volatility: 2.0%
Litecoin, often referred to as the silver to Bitcoin's gold, offers day trading opportunities due to its liquidity and historical price movements. With a faster block generation time compared to Bitcoin, Litecoin can provide traders with quicker confirmation times for their transactions. In addition, Litecoin is rapidly approaching its next halving event, which has historically been a precursor to considerable volatility in the Litecoin markets.
8. Avalanche (AVAX)
Average daily volume in November 2023: $865 million
30-day volatility: 6.3%
Avalanche is a blockchain project that might not always be at the center of the cryptocurrency community's attention. However, it's hard to deny that the Avalanche blockchain is a very robust and highly scalable blockchain platform and one of the most credible competitors to Ethereum. As one of the top 20 biggest cryptos by market cap, Avalanche's native asset, AVAX, boasts significant liquidity and occasionally enters periods of heightened volatility that make it a very compelling option for crypto day traders.
The bottom line: What’s the best day trading crypto option depends on your trading profile
When it comes to day trading cryptocurrencies, choosing the right assets is crucial for success. While this article has highlighted some of the top choices for day traders, it's essential to conduct thorough research, monitor market trends, and stay updated with the latest news and developments.
Remember, day trading involves risks, and it's important to implement proper risk management strategies and trade responsibly. Also, crypto day traders, like forex investors, can benefit from using trend lines to identify and analyze price movement trends
Whether you decide to focus on Bitcoin, Ethereum, XRP, or any other cryptocurrencies, developing a solid trading plan and employing effective technical and fundamental analysis will be key to maximizing your day trading profits. If you don’t mind additional risks when day trading, you can try to find low market cap cryptos that show bullish promise to potentially amplify your day-to-day returns.
