Choosing the right pair depends on your strategy, risk level, and current market conditions. Here are key criteria and tools to help make a decision:
1. Define your strategy
- Scalping/short-term: Pairs with high volatility and liquidity (BTC/USDT, ETH/USDT, SOL/USDT).
- Swing trading (medium-term): Pairs that form patterns (triangles, flags). Example: ADA/USDT, DOT/BTC.
- Investing (long-term): Pairs with a strong fundamental base (BTC, ETH) or promising altcoins (RWA-tokens, AI projects).
2. Analyze liquidity and volumes
Liquidity is the ability to quickly buy/sell an asset without changing the price. Where to check:
- CoinMarketCap or CoinGecko: Check the 24-hour trading volume.
- Order Book: A narrow spread between the buying and selling price is a sign of liquidity.
Example:
- Highly liquid pairs: BTC/USDT (volume $20+ billion), ETH/USDT ($8+ billion).
- Low-liquid: small altcoins like PEPE/BTC (volume < $1 million) — risky for large trades.
3. Assess volatility
Volatility indicates how much the price changes.
- High volatility: Memecoins (DOGE, SHIB), new projects. Suitable for scalping.
- Low volatility: BTC, stablecoins (USDT, USDC). Suitable for conservative strategies.
Tools:
- ATR (Average True Range): Shows the average price movement range.
- Volatility over 30 days on TradingView.
4. Conduct technical analysis
- Trend: Use moving averages (MA 50/200) or trend lines.
- Example: If BTC/USDT is above the 200-day MA — the trend is upward.
- Support/resistance levels: Find areas where the price has reversed before.
- Indicators: RSI (overbought/oversold), MACD (divergences).
Example for ETH/BTC:
- If ETH/BTC tests the resistance level of 0.05 BTC and RSI < 30 — a breakout upwards is possible.
5. Consider fundamental factors
- News: Launch of updates (e.g., Ethereum hard fork), partnerships, listings.
- Events: Halvings (Bitcoin), voting in DAO.
- Regulatory changes: For example, approval of BTC-ETF or bans in certain countries.
Where to follow:
- CryptoNews, CoinDesk, The Block.
- Official Twitter accounts of projects.
6. Compare pairs by risks
- BTC pairs (BTC/USDT, ETH/BTC): Less risky, as BTC often acts as a 'safe haven'.
- Altcoin pairs (ADA/USDT, SOL/ETH): Higher risk, but also growth potential.
- Stablecoin pairs (BTC/USDT): Protection against cryptocurrency market volatility.
Tip: To start, choose 1–2 pairs to avoid spreading yourself too thin.
7. Examples of pair selection
- For beginners: BTC/USDT (low spreads, predictability).
- For medium risk: ETH/USDT (balance of volatility and liquidity).
- For high risk: New tokens on Binance Launchpad (e.g., SAGA or PORTAL).
8. Check fees and spreads
- Spread: The difference between the buying and selling price. On exchanges like Binance, the BTC/USDT spread is 0.01%, on low-liquid pairs — up to 1–2%.
- Fees: On spot trading on Binance — 0.1%, on futures — up to 0.06%.
Important: High fees will 'eat' profits with frequent trades.
9. Test strategies on demo accounts
Platforms like Binance Futures allow trading with virtual $10,000. Example test:
- Open 10 trades on the XRP/USDT pair using MACD and a 2% stop-loss.
- Analyze what share of trades was profitable.
10. Risks and how to avoid them
- Market risk: Diversify your portfolio (e.g., 50% BTC, 30% ETH, 20% altcoins).
- Liquidity risk: Avoid pairs with volume < $1 million.
- Emotional mistakes: Stick to your trading plan and don't deviate due to FOMO.
Conclusion
The best pair to enter is the one that aligns with your strategy, has sufficient liquidity, and is supported by technical/fundamental analysis. Start small, use stop-losses, and take profits. As you gain experience, expand your list of tools.