A disturbing increase in market moods in cryptocurrency trading
Cryptocurrency markets have long been known for its volatility, but the recent trend caused that the shock waves by the commercial community. The growing moods against some cryptocurrencies, especially Bitcoins (BTC), have led to significant price fluctuations and changed market dynamics.
** What is market moods?
The sentiment of the market refers to the emotional state of the market as under the influence of various factors, such as messages, rumors and speculation. It is a measure, how many traders and investors are optimistic or pessimistic regarding a specific class of cryptocurrency or assets. In the context of bitcoins, sentiments can be measured using various indicators, including:
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- Sentiment of social media
: Analysis of internet forums, social media platforms and information services to track public opinion.
- price movement
: direction and speed of price changes.
Bitcoin trade strategies
When the sentiment becomes more and more negative or positive,
- This may cause significant losses, especially if the trend is continued.
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- Draft liquidity :
Popular commercial strategies affected by sentiment
Several popular commercial strategies affected market moods:
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- Negative moods can lead to a reduction in trade volume and increasing slip speed.
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- Strategies based on rush : Some investors focus on identifying actions with strong price movements or shoots indicators that can be increased by market moods.
Examples of price fluctuations based on sentiments
- 2020: BTC/USD 1%increase
In 2020, Pandemia Covid-19 led to a significant increase in Bitcoin price from around USD 3300 to over USD 10,000. This phenomenon caused market moods, participating institutional investors and macroeconomic uncertainty.
- 2018: BTC/USD price variability
Winter in 2018 Bitcoin fell from the summit from mid-2017 to a low level of USD 3,200, mainly due to negative moods around US-Chin trade tensions.
Application
Market sentiment plays a significant role in determining the direction and variability of cryptocurrency markets, including bitcoins. As investors of these trends, they must be careful when investing in unstable assets such as BTC. Understanding the market moods of dynamics, traders can develop effective strategies for moving price fluctuations and maximizing their returns.
Recommendations for market participants
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