The alarming rise of market feeling in the cryptocurrency trade
Cryptocurrency markets have long been known for their volatility, but a recent trend has sent shock waves through the commercial community. The growing feeling towards certain cryptocurrencies, in particular Bitcoin (BTC), has led to significant fluctuations of priceless prices and dynamics.
What is the feeling of the market?
The feeling of the market refers to the emotional state of the market as influenced by various factors such as news, voices and speculations. It is a measure of how many traders and investors are optimistic or pessimistic on a particular cryptocurrency or business class. In the context of Bitcoin, feeling can be measured using various indicators, including:
- Trader sentiment : a survey of professional traders to evaluate their trust in the market.
- Feeling of social media : online forum analysis, social media platforms and news to trace public opinion.
- Price movement : the direction and speed of price variations.
The impact on Bitcoin Trading strategies
When feeling becomes increasingly negative or positive, it can have a significant impact on trading strategies for various reasons:
- Risk aversion : negative feeling can lead to a decrease in appetite at risk, causing the reduction of investors or the market exit. This can involve significant losses, in particular if the trend continues.
- Excessive exposure : on the contrary, positive feeling can lead to excessive exposure to certain activities, with consequent increase in prices volatility and reduced volumes of negotiation.
- Liquidity Dips : When feeling is highly negative or positive, liquidity can decrease, making it more difficult for traders to enter or get out of the positions.
Popular trading strategies affected by feeling
Several popular trading strategies have been influenced by the feeling of the market:
- Long -term investment schemes (LTI) : some investors, in particular those with large wallets, can opt for long -term investment patterns, such as the average of the dollar or the coverage against the fluctuations of the Prices.
- Trading of one day : daytime traders often rely on short -term price movements for profit from intraday operations. Negative feeling can lead to a reduction in negotiation volumes and an increase in slip rates.
- Swing Trading
: Swing operators can use market feeling to inform their trading decisions, such as the purchase or sale of positions based on the readings of the relative resistance index (RSI) or of the motorcycle indicators.
- strategies based on the moment : some investors focus on the identification of securities with strong price movements or motorcycle indicators, which can be influenced by the feeling of the market.
Examples of price fluctuations guided by feeling
- 2020: The rise of BTC/USD 1%
In 2020, Covid-19 pandemic led to a significant increase in the Bitcoin price from about $ 3,300 to over $ 10,000. This phenomenon was guided by the feeling of the market, in particular between institutional investors and macroeconomic uncertainty.
- 2018: the volatility of the prices of BTC/USD
The winter of 2018 saw Bitcoin fall from his summit in mid-2017 to a bass close to $ 3,200, largely due to the negative feeling that surrounds the US commercial tensions.
Conclusion
The feeling of the market plays a significant role in determining the direction and volatility of the cryptocurrency markets, including Bitcoin. As investors become more aware of these trends, they must be cautious when investing in volatile activities such as BTC. By understanding the dynamics that guide the feeling of the market, traders can develop effective strategies for navigating prices fluctuations and maximizing their yields.
Recommendations for market participants
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