Learn about the top 11 cryptos to day trade, focusing on volatility, volume, and liquidity, essential for quick trades.
Written by: Anatol Antonovici | Updated August 25, 2024
Reviewed by: Mike Martin
Fact checked by: Ryan Grace
Day traders love cryptocurrencies because of their significant price fluctuations, which can result in both substantial profits and losses. It is worth noting, however, that most day traders lose money.
In this article, we discuss the 11 best cryptocurrency coins for day trading.
Table of Contents
🍒 tasty takeaways
Day trading is a strategy where traders open and close positions within the same day.
Cryptocurrencies offer high volatility and round-the-clock trading, making them ideal for day trading strategies like scalping.
Key factors for selecting day trading cryptos include high volatility, substantial trading volume, and strong liquidity, with Bitcoin often setting the market trend.
Summary
| Token | Category | Market Cap |
|---|---|---|
| BTC | Independent blockchain network | $1.4 trillion |
| ETH | Independent blockchain network | $433 billion |
| SOL | Independent blockchain network | $73.1 billion |
| LINK | Decentralized application | $9.5 billion |
| BNB | Independent blockchain network | $92.8 billion |
| AVAX | Independent blockchain network | $13.2 billion |
| ADA | Independent blockchain network | $15.7 billion |
| MATIC | Ethereum scaling solution | $6.4 billion |
| DOT | Independent blockchain network | $9.6 billion |
| DOGE | Memecoin | $21.6 billion |
| XRP | Payment blockchain network | $27.4 billion |
Why Day Trade Cryptocurrencies?
Cryptocurrencies are one of the best asset classes for day trading thanks to their high volatility, round-the-clock availability, and opportunities for both long and short exposure.
Many investors are attracted to digital currencies because of their generally low correlation with traditional assets like stocks, precious metals, and forex pairs. While Bitcoin can occasionally exhibit correlations with gold and stocks during specific economic conditions, it predominantly moves independently.
Source: TheBlock
What Is Day Trading?
Day trading is a method where traders open and close positions within the same trading day. Day trading strategies, like scalping, may involve positions being open for mere minutes.
Unlike stock markets, there’s no hard rule to close positions at day’s end in the crypto market. Additionally, you can not be flagged as a ‘pattern day trader’. Since crypto operates round-the-clock, positions can be held overnight, aiming for higher profits or awaiting a limit order to activate.
Crypto assets can be more suitable for day trading compared to other assets due to their high volatility, which can be exploited for short-term price movements.
Typically, day traders employ technical indicators and closely monitor market sentiment more often than swing traders and ‘hodlers’—a term in the crypto community meaning ‘hold on for dear life’.
🍒 There are both tokens and coins on our list. Read how they differ here!
Things to Know Before Day Trading Cryptos
Choosing the best crypto coins for day trading might seem overwhelming given the vast selection, yet it’s important to note that Bitcoin’s trend often influences the entire crypto space, observable in larger timeframes.
Therefore, while you analyze the market sentiment of specific cryptocurrencies, you should always keep an eye on Bitcoin, which has a 52.3% market dominance, or share of the entire cryptocurrency market.
Source: TradingView
How to Pick Cryptos to Day Trade
Here are a few key factors you should consider when picking assets for crypto day trading:
- Volatility – day traders are interested in sizeable short-term price fluctuations, so crypto coins with higher volatility are preferred. Most digital coins show increased volatility, except for stablecoins, which are pegged to traditional assets, predominantly the USD.
- Trading volume – larger trading volumes suggest healthier market conditions and more predictable price swings that tend to follow the logic of technical analysis more often.
- Liquidity – day traders should pick crypto assets that can easily be sold for fiat, stablecoins, or other tokens. Ideally, the selected cryptocurrencies are listed on major crypto exchanges like Coinbase and Binance, as well as on decentralized exchanges (DEXs) like Uniswap, SushiSwap and PancakeSwap.
- Utility – cryptocurrencies with certain utility, especially the ones targeting a narrow use case, can show a lower correlation to the rest of the crypto market. For example, Ethereum dominates the decentralized finance (DeFi) space, Chainlink offers oracles, while Polkadot focuses on interoperability.
🍒 To invest in many of the tokens on our list, you’ll need a self-custody crypto wallet. tastycrypto offers self-custody wallets in the form of mobile apps and a browser extension.
Best Cryptocurrencies to Day Trade
Here are the top crypto coins for day trading:
1. Bitcoin
Token: BTC
Category: Independent blockchain network
Bitcoin is the oldest and the largest cryptocurrency by market cap, and it still dominates the blockchain space. While it doesn’t support smart contracts or offer additional utility, it is preferred by many investors as a great store of value (SOV).
With a market capitalization of over $1 trillion and a daily trading volume of $29+ billion, BTC has lower price slippage and greater predictability compared to altcoins.
2. Ethereum
Token: ETH
Category: Independent blockchain network
Ethereum is the largest blockchain network supporting the smart contract feature. It enables developers to build decentralized applications (dapps) and tokens on top of it. The Proof of Stake (PoS) network currently dominates the DeFi sector.
ETH is a $432 billion market as of today, and its daily trading volume exceeds $15 billion.
3. Solana
Token: SOL
Category: Independent blockchain network
Solana is a PoS chain that aims to offer greater scalability, speed, and flexibility compared to Ethereum. The Solana ecosystem comprises dapps and tokens related to a wide range of use cases, including DeFi, payments, infrastructure, gaming, and the metaverse.
SOL is currently the fifth-largest cryptocurrency, with a market cap of $73 billion and a daily volume of $2+ billion.
4. Chainlink
Token: LINK
Category: Decentralzied application
Chainlink stands as the foremost decentralized oracle network, facilitating blockchain connections with the real world and other chains, thereby mitigating fragmentation in the blockchain market through cross-chain communication.
Chainlink is a $9 billion market, with over $400 million worth of LINK changing hands within 24 hours.
5. BNB
Token: BNB
Category: Independent blockchain network
BNB is the native cryptocurrency of BNB Chain, a public decentralized network developed by Binance, the largest cryptocurrency exchange by trading volume. While Binance is a centralized company, BNB Chain is an independent Ethereum-like network leveraging a PoS algorithm called Proof of Staked Authority (PoSa).
BNB (Binance Coin) is the fourth-largest crypto, with a market cap of over $80 billion and a trading volume of $2 billion.
6. Avalanche
Token: AVAX
Category: Independent blockchain network
Avalanche is yet another blockchain offering smart contract functionality. Its goal is to solve the blockchain trilemma by achieving decentralization, scalability, and security without any compromise. The network has a complex ecosystem comprising three separate chains that work together. Thanks to Ethereum Virtual Machine (EVM) compatibility, Avalanche apps can also run on Ethereum.
AVAX is a $10 billion market, and its daily trading volume exceeds $340 million.
7. Cardano
Token: ADA
Category: Independent blockchain network
Cardano was developed in 2017 as an alternative to