How to Short Sell Crypto in a Bearish Trend

Short selling is one of the strategies often used by traders to profit amid a bearish trend. In the notoriously volatile cryptocurrency market, this strategy allows a person to remain profitable even when the price of an asset is falling.

However, taking this position in crypto trading is not without risk. A thorough understanding of the mechanisms and platforms that support short selling is essential for traders to execute it successfully.

What is Short Selling in Crypto?

Short selling is a trading strategy where a trader borrows a crypto asset, sells it at the current market price, and hopes the price will fall so they can buy it back at a cheaper price.

The difference between the selling and buying price becomes the trader's profit. For example, if you borrow Bitcoin at US$30,000 and buy it back when the price drops to US$28,000, your profit is US$2,000 per BTC (minus transaction fees and interest).

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