Bitcoin and the Altcoins have been known for one thing. Their volatility in terms of prices. Recently, Bitcoin prices crashed intermittently and sent the cryptocurrency space into a tailspin.
We were concerned about this and reached out to Ruud Feltkamp of CEO at CryptoHopper for more details.
CryptoHopper is an automated cryptocurrency trading bot that is cloud-based.
Accounts from different cryptocurrency exchanges are managed in one dashboard giving the trader access to tools and opportunities that may occur within the space.
Here is what he had to say.
Ruud Feltkamp of CEO at CryptoHopper
Please, can you explain to us what happened in the recent flash crash?
Bitcoin has been on the rise again lately. It broke previously through several resistances. If the price encounters a significant resistance, it is not surprising that the price bounces down a lot as a result. When we enter an area close to the ATH (All-Time High), prices encounter stronger resistance, and it takes Bitcoin more effort to get through this price level. Until we’ve broken the ATH, I wouldn’t be surprised to see more of this volatility.
How did Bitcoin prices suddenly just go south?
If you look closely at the markets and draw horizontal lines, you will see that the price will either bounce upon the support or go down at a resistance. When one or more whales sell on such a resistance, the price can plummet. If this triggers other people stop-losses, this can drive the price down even more.
What are the market mechanics behind flash crashes?
There could be various reasons. However, what often happens with low liquidity coins is that a big sell order of a whale can already cause a flash crash. This can trigger other people’s stop-losses and margin calls, causing the price to drop even more. It’s like a pile-up.
With the adoption of Bitcoin by El Salvador, what do you think will happen to Bitcoin prices?
It’s good news that sends positive news about Bitcoin all over the world. Suddenly it’s not weird anymore that a country can recognize a cryptocurrency as legal tender.
How volatile do you think cryptocurrency prices will become?
Now we’re nearing the ATH of Bitcoin, and I’m expecting more volatility. This gives extra trading opportunities for traders on Cryptohopper. It’s easy to identify where the prices bounce, which is something our traders automate.
Please, can you tell us more about CryptoHopper?
Cryptohopper is a tool that traders use to automate their trading. You can either copy expert traders or build bots yourself. We were the first in crypto that offered trading signals in combination with a bot and are now the first with a trading A.I. that learns and adapts automatically on the markets.
How do arbitrage opportunities occur across cryptocurrency exchanges?
Different exchanges can have slightly different prices depending on their volume. Therefore minor discrepancies between exchanges can still exist. This is something Sam Bankman-Fried (FTX) earned a lot with.
What are the benefits of automated cloud trading?
A human can’t possibly follow hundreds of coins 24/7; however, an automated trading system can. Without emotion, many people lose money not because they have lousy trading strategies but rather because they can’t keep their emotions in check and make irrational decisions.
Where do you see Bitcoin prices going by Christmas?
I’m fully convinced Bitcoin will reach its ATH around Christmas. Why? This cycle is so similar to 2017, it’s scary. If it reaches 50% of the market cap of gold, we’ll see a price of above €500k. On a gut feeling, I would say we reach $250k.
How has 2021 been for CryptoHopper?
Insane. We’ve grown so much! It allowed us to grow the team a lot. We’ve hired the C-level, lots of developers, product people, and support members—all without any external funding. We’ve got a fantastic roadmap ahead of us, with lots of awesome stuff coming. Can’t wait to show it to the world! (spoiler, our new IOS app is going to be released within a week).
How did you get into cryptocurrency trading?
I always had a passion for business and emerging technologies. I like to keep up with new trends in tech. So when I fully understood the idea of cryptocurrencies, I became enthusiastic. I instantly became an advocate and tried to convince everyone to invest and join the space as well. My brother is a brilliant developer, and he came with the idea to automate our trading. The rest is history.
What advice do you have for anyone who wants to trade cryptocurrencies?
DYOR. Do your research. Prepare to lose money due to rookie mistakes. The best thing is to start with paper trading (simulated trading). We offer that too. Just take your time to learn and slowly increase the amounts you’re trading with. Start with funds you can afford to lose, and make sure you don’t let emotions get the best out of you.
What are your thoughts on countries adopting cryptocurrencies as legal tender?
Love it! The impact on all people worldwide will be as significant as the impact the internet had. In addition, for less developed countries, it will allow many unbanked people to join the economy.
It’s also something you can’t avoid. You can already pay with crypto in so many webshops, but also in regular shops as well. If you have a Binance or Coinbase card, you can pay almost everywhere with your crypto. So I think it’s the logical next step.
What do you think will be the greatest all-time high for Bitcoin?
It depends on how this cycle will end. I think crypto will have its own “Dotcom bubble” at a certain point. I think that’ll happen in the next cycle. There are too many projects that don’t have any value. I’m waiting for the moment when you can trade a fraction of real estate. Imagine paying with your shares of real estate in a shop. That’s the moment when I think the actual bubble will take place. What will Bitcoin be worth then? Perhaps over $1.000.000.
Is there any scenario where you think another cryptocurrency will overtake Bitcoin as the dominant cryptocurrency?
That’s not a weird scenario at all, but not in the short term. Bitcoin is currently regarded as cryptocurrency gold and will probably continue to be so for the foreseeable future. Institutional investors and newcomers to the crypto market mostly start with Bitcoin and then invest in other cryptocurrencies.
The use cases of bitcoin are pretty limited for now as it is mainly used as a store of value and for payments. Blockchains that offer smart contracts, such as Ethereum and Solana, will bring many more use cases, resulting in higher demands and seeing X times the number of transactions compared to BTC. Think about DeFi, NFTs, borrowing and lending, and more.
What are your thoughts on high-speed automated trading?
I would say there is a difference between regular automated trading and High-Frequency Trading (HFT). While high-frequency trading can be lucrative, it requires costly software and is not always more lucrative than common trading bots made with technical analysis.
Automated trading can help investors make better trading decisions due to settings they can configure and make tens or hundreds of trades a day.
With HFT it’s the higher the speed, the better. This is what makes traders from FlowTraders, for example, so good. You need a low latency system. Offering this to retail traders is a challenge because you want to keep being affordable and user-friendly.
Do you have any secrets you want to tell us? Care to spill the beans?
It’s not released yet, but our new mobile app is so awesome!! After launch, we’ll immediately work on expanding its features, we’ve got so many great ideas. Did you know that we’re the first trading bot with an app with so much functionality? Android users will have to wait a little longer, unfortunately.
If you had three wishes for the cryptocurrency space and a genie that could make them come true, what would they be?
Let’s put real-life stuff on the blockchain asap. I want to invest in real estate—Fractionalized and automatically.
I hope people will do good with it. It would be nice if good charity coins come into play. We could fund charity by trading/holding certain coins, for example.
And the last one, I hope the whole world will start using Cryptohopper. It would be an honor!