I. What is Crypto Trading?

Crypto trading is the process of buying and selling cryptos to make a profit from price fluctuations.

• 24/7 Operation: Crypto markets operate continuously, unlike traditional financial markets.

• Strategy Focus: Traders use strategies ranging from day trading to long-term investments (HODL) to capitalize on market volatility.

• Modern Trading (2025): The landscape is sophisticated, requiring knowledge of trading pairs, market orders, and technical analysis for effective strategies.

• Indian Context: Starting requires choosing reputable, KYC-compliant exchanges (like Cofinex) to buy and sell crypto securely.

• Instruments: Trading involves instruments like spot trading, futures, and options.

II. How the Crypto Market Works

The crypto market is a global, decentralized ecosystem that allows users to trade digital assets 24/7. It is primarily facilitated through digital platforms known as exchanges.  

The Core Function: Decentralized Trading

• Decentralized Foundation: The market operates on blockchain technology, enabling direct, transparent transactions between participants without a central authority.  

• Peer-to-Peer (P2P): The system is fundamentally designed for users to transact directly with each other.  

Role of Exchanges (The Marketplace)

Exchanges are the primary platforms that connect buyers and sellers to facilitate trading.  

• Intermediaries: Exchanges act as a matchmaker, connecting buyers and sellers of digital assets.  

• Infrastructure Provider: They supply the necessary tools for users, including:

  • Wallets for asset storage (in CEXs, the exchange is the custodian).  

  • Trading Engines to match orders efficiently.

  • Market Analysis tools (charts, data).  

• Advanced Features: Many platforms offer sophisticated trading instruments like margin trading, futures contracts, and automated trading bots.  

• Access Requirements: To begin trading, users typically need to:

  • Create an account.  

  • Complete KYC (identity verification).  

  • Deposit funds (fiat or crypto).  

  • Select the desired crypto trading pair (e.g., BTC/USD).

III. What Moves the Crypto Market?

Understanding the factors that influence crypto prices is crucial for anticipating market movements and developing successful strategies.

Factor	Description	Example/Impact
Supply and Demand	The fundamental driver. Limited supply (like Bitcoin’s 21M cap) drives prices up when demand increases.	High demand for a scarce coin causes a price surge.
Market Sentiment	Public perception and emotional response.	Positive news (institutional adoption) boosts prices; negative news (security breach) causes sharp declines.
Regulatory News	Government and central bank decisions (e.g., RBI in India).	Favorable regulations boost confidence; restrictive changes can impact trading volumes.
Technological Advancements	Upgrades to blockchain technology or promising new project launches.	Innovations in a network (e.g., Ethereum’s transition to PoS) attract investors.
Macro-Economic Factors	Broader economic conditions (e.g., inflation, economic stability).	Crypto is often seen as a hedge against currency devaluation, increasing demand during uncertainty.
Market Manipulation	Actions by Whales (large crypto holders) or organized pump-and-dump schemes.	Creates artificial or sudden volatility.
Adoption and Utility	The real-world application of a crypto and its underlying technology.	Coins used for DeFi, smart contracts, or dApps tend to hold or increase value.
Global Market Trends	Correlation with movements in traditional finance (stock market, gold, oil).	Broader financial trends increasingly influence crypto prices.