Trends and cycles of the cryptocurrency market: what you need to know
The world of cryptocurrency has undergone enormous growth and volatility in recent years, making it a very refined investment opportunity. However, as for any market, understanding the trends and cycles that shape the cryptocurrency panorama is crucial to make informed decisions about your investments.
What are the tendencies of the cryptocurrency market?
The cryptocurrency markets are guided by the supply and demand forces, influenced by various factors such as the feeling of investors, technological progress, regulatory developments and global economic conditions. These trends can be classified in three main types:
- Trends based on the offer : these occur when the total offer of a cryptocurrency exceeds its question, causing the drop in prices.
- Trends guided by the question : on the contrary, these occur when the demand for a particular cryptocurrency exceeds the offer, leading to an increase in prices.
- Neutral trends : these are periods in which the feeling of the market is uniformly balanced between the supply and demand forces.
Cycles in the trends of the cryptocurrency market
The cryptocurrency markets have experienced several cycles over the years, each with its own unique characteristics:
- Trendy cycles : historically, cryptocurrency markets follow a trendy cycling model, which can be identified through the technical analysis of graphic models, such as: for example:
* The 4 -hour candles model: bullish (bull) and Bearish (bear)
* The RSI at 14 days (relative resistance index): bearish
- Cyclical cycles : some cryptocurrency markets have cyclic patterns, in which a trend follows by reversing or repeating itself after a period of decline:
* Bull Run 2017-2018 of Bitcoin and subsequent correction
* Increase 2020-2021 by Ethereum and subsequent correction
Understanding of cryptocurrency market cycles
To navigate in the complex panorama of the cryptocurrency market, it is essential to understand how cycles work:
- Inversion cycles : When a trend begins to reverse or break, it can lead to significant price movements.
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- Neutralization cycles : markets can return to their original state after a prolonged recession.
Mercato key indicators to watch
When analyzing the tendencies and cycles of the cryptocurrency market:
- Models of Candelabri : uses technical indicators such as the divergence of medium mobile convergence (Macd) and RSI to identify trendy changes.
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Investment strategies
To navigate in the constantly evolving panorama of the cryptocurrency markets:
- diversification : spread investments between different cryptocurrencies to minimize risk.
- Risk management : Set the arrest levels and limit exposure to a single activity or market.
- Long -term perspective : focus on retaining investments for prolonged periods, since cryptocurrency prices can be highly volatile.
Conclusion
Cryptocurrency markets are intrinsically complex and subject to various trends and cycles. By including key indicators, risk management strategies and long -term perspectives, investors can make informed decisions on their investments in this rapidly evolving market.
While past performances are not a guarantee of future results, it is essential to remain updated with market trends and be prepared for potential changes while the panorama of cryptocurrencies continues to evolve.