Short Selling Bitcoin and Cryptocurrencies on KuCoin Exchange

Shorting Bitcoin or other cryptocurrencies can be done in many different ways. Some exchanges don’t support any of the techniques, while others do. Fortunately, KuCoin offers all of the short-selling possibilities.

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In spot trading, cryptocurrency traders buy assets in the hopes that their value would increase in order to make a profit. When the value of digital assets increases, a cryptocurrency trader can sell them right away and make money.

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Another alternative for spot traders is to short the market, however this differs from shorting KuCoin futures. You must already have a cryptocurrency in your portfolio in order to short it. Therefore, when the value of financial assets (such as crypto coins) decreases, it is necessary to sell some and buy more at a cheaper cost.

Consider the following scenario: You have 1 BTC in your spot wallet and predict that the price of Bitcoin will drop from $50,000 to $40,000 during the next few days. When the price of Bitcoin drops to $40,000, you can buy it back after selling it for a greater price of $50,000. You cannot use margin or leverage in spot trading, and you can only sell the total quantity of coins in your portfolio. Therefore, your profit will be the difference between the Selling and Buying prices when you buy back 1 BTC at a cost of $40,000.

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On the KuCoin Futures Market, how do I short cryptocurrencies? If you want to increase trading volume of cryptocurrencies on the drevitives market , you can use leverage to make profit. Without needing to possess the underlying asset, cryptocurrency traders can use KuCoin futures to protect themselves from the downside risk of the spot market and arbitrage funding costs.

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How do KuCoin Futures work?

A sophisticated platform for trading cryptocurrencies, KuCoin Futures offers a number of leveraged futures contracts that can be exchanged in Bitcoin and other cryptocurrencies.

KuCoin Futures trades in USDT margined and Coin margined pairs like BTC Perpetual/USDT or ETH Perpetual/USD instead of fiat currency or other cryptocurrencies. While all gains and losses are reported in Bitcoin, Ethereum, US Dollars, etc.

In addition to BTC and ETH, KuCoin also offers DOT and XRP coin-margined contracts. Below is a screenshot showing these:

On KuCoin Futures, you may also short cryptocurrencies. Therefore, waiting for a market to hit a specific price level to short a cryptocurrency does not always require you to be using a computer or a mobile device. The Futures trading platform will instead automatically short a certain cryptocurrency on your behalf when you post a Sell/Short pending limit order.

Stop Order: A stop order is a purchase that is carried out only if the price of the underlying asset reaches a specific stop price. Set the trigger type, stop price, order price, and order quantity to create a stop order on Futures.

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Therefore, you can set a Sell/Short limit at a specified price if you think a particular cryptocurrency’s price will decline after reaching a certain level. The KuCoin futures trading platform will then automatically execute your short order.

Let me remind you that the key benefit of shorting cryptocurrency is to profit from a price that is lower tomorrow than it is today. The majority of short position trading strategies aim to gain profit in both bull and bear markets.

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