The impact of the feeling of the market on trading strategies of cryptocurrencies
The world of cryptocurrency trading is known for its volatility and unpredictability. The market can change quickly, the fluctuating prices wildly in a few hours. In this article, we will explore the impact of the feeling of the market on Bitcoin negotiation strategies (BTC) and how traders can adapt to these changing conditions.
What is the feeling of the market?
The feeling of the market refers to the collective attitude or the opinion of investors on a particular asset or a stock market trend. It is essentially the emotional state of the market, which can be influenced by various factors such as economic indicators, headlines, social media buzz and even emotions such as fear and greed.
How does the feeling of the market affect Bitcoin trading?
Regarding the trading of cryptocurrencies like BTC, the feeling of the market plays a crucial role. Here are some ways whose feeling of the market affects Bitcoin trading:
- Tendance confirmation : When the feeling of the market is optimistic (that is to say, investors expect the price to increase), traders are more likely to buy and keep their positions. Conversely, when the feeling is lower (investors expect the price to drop), sellers are more likely to push the price down.
- Price volatility : The feeling of the market influences the degree of price volatility in a particular asset. When the feeling is positive, prices tend to be more volatile, while negative feeling leads to less volatility.
- Risk tolerance
: The feeling of the market can also affect the risk tolerance of traders. The feeling based on fear (for example, the fear of losing money) can lead investors to take more risks, while optimistic feeling (for example, confidence in market growth potential) allows them to keep their positions with more confidence.
- Trading strategies : The impact of market feeling on trading strategies is significant. For example:
* Buy and hold : When the feeling of the market is positive, traders can choose to buy and have long -term positions, while waiting for the price to increase.
* Sale uncovered : Conversely, when the feeling of the market is lower, traders could decide to sell uncovered, expecting the price to drop.
* Trendy monitoring strategies : When the feeling of the market is negative, the strategies for monitoring trends (for example, the identification of trends and trade against them) become more attractive.
Case study: How the feeling of the market influenced Bitcoin trading in 2020
In 2020, the Bitcoin price experienced significant volatility due to various factors, including the COVVI-19 pandemic. Here are some key events related to the feelings of the market that have had an impact on BTC trading:
* February 2020 : The COVVI-19 epidemic has led to a sharp drop in world stock markets, which means that Bitcoin has known its biggest decrease of one day since August 2017.
* March 2020
: The federal reserve announced an emergency loan program of $ 1.2 Billion of dollars to combat the economic impact of the pandemic on consumers and businesses.
* May 2020 : The US government has announced CARES ACT, providing rescue measures to people affected by the pandemic.
In response to these events, the feeling of the market has moved to the lowerness as investors have become more pessimistic about the long -term prospects of Bitcoin. Therefore:
- Law Price : The BTC price increased from $ 9,650 in January 2020 to $ 4,000 by May 2020.
- ELLS ONDERBODE : Traders who had already sold Bitcoin have started to sell it in anticipation of its decline.
Conclusion
The impact of market feeling on Bitcoin trading strategies is significant. By understanding how investors’ emotions and opinions shape the market, traders can adapt their strategies to meet changing conditions. The feeling of the market is a dynamic factor that influences price movements and risk tolerance, which makes essential traders to remain informed of economic indicators, news of news and buzz on social networks.
ETHEREUM WHAT ORDERS MAGNITUDE