The cryptocurrency sector has a reputation for being volatile and timely, and this characteristic was highlighted in the month of May when the price of Bitcoin (BTC) dropped from $ 60,000 to $33,000, resulting in a mass exodus that wiped out $ 1,2 trillion from the overall market capitalization.
Nonetheless, many in every ecosystem have received errors for decline based on events such as negative tweets from influencers and strong figures such as Elon Musk or other announcements stating that the Chinese government has banned Bitcoin, experienced traders and analysts warn about potential attraction sign.
Uber drivers and grocers delight as a hit to offer their opinions on what will be the next big mover in 2021 showing some classic signs of bubble-like behavior, with alarm bells ringing.
With this in mind, now is a good time to review a variety of stages of the market cycle in order to help you gain a better understanding of what has been happening in the market since the beginning, as well as what you may expect in the next month and years.
This phase was seen in the cryptocurrency market starting around December 2018, when the price of BTC was lowest at $3,500, and extended to October 2020, when the price started to meaningfully rise above $12,000. The mark-up phase really started to attract global attention in December 2020 and was extended to January 2021 as BTC and the decentralized financial sector (DeFi) caught global attention, with total market capitalization climbing to highs of over $2.5 trillion. Sellers began to dominate. and the previous bullish sentiment turned mixed in the trading range in the distribution phase, causing the price to lock in the trading range. The phase ends when the market reverses direction.
Investopedia has identified many typical chart patterns seen this week, including the double and triple tops alongside the well-known head and shoulders pattern, which constitute the warning signs presented by BTC and seen ... In line with the bull market of 2017 -2018, the price of Bitcoin (BTC) reached a new high during the first half of the year (ATH) and then began to decline, putting a cap on the amount of money that can be transferred from Bitcoin to other cryptocurrencies. This has in a decrease in the amount of money that can be transferred from Bitcoin to other cryptocurrencies, pushing the total capitalization of the market to a new high of $2.53 trillion on May 12th.
For seasoned crypto traders, this is a warning that the phase of obtaining a profit is becoming more difficult, as BTC fluctuates between $40,000 and $60,000, while altcoins soar to higher levels over time as a means of exiting the market. -off and grab tokens with a discount during the bottom. In the aforementioned
Now that the market has suffered a significant setback, and continues to look for a price floor, this is an important time to monitor price movements, with the aim of finding good entry points into the feasible project.
There is now a challenge to overcome depression caused by a portfolio that is more expensive and to determine whether the market has reached the lowest point, implying that now is the best time to move funds, or that the best thing they can do is them and wait for the development of se.
Major price rallies so far have often been viewed distrustfully as sucker rallies — thus, the cycle is over, and we're back to the beginning.
So, does this mean that now is a good time for you to get your hands on a token for your favorite project?
Unfortunately, to that question, there is no guarantee of a right answer, and that is something one investor has to determine. With the token that was widely used previously, and now with a significant discount as compared to only a single month ago, this may be a good time to start calculating the average dollar cost back to the top long term option in preparation for the next cycle higher.
The typical cycle here can be applied to the market as a whole and to individual tokens or token sectors.
To make the most of this opportunity, traders must adopt a counterintuitive mindset. The accumulation phase is often marked by a decline in sentiment, but the optimal time to sell is during the distribution phase when sentiment is at its highest and big fortunes are going all-in.
Whatever the market outlook is, the best course of action is probably to adopt a wait & see approach while keeping some dry powder on the sidelines to take advantage of the "quick sale" that may come. Whatever it is that you want to do, understand that you must conduct your own research and have a risk management process in place. due to the historically volatile nature of the cryptocurrency market showing no signs of abating any time soon.
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