Cryptocurrency: Understanding the market cycles
In recent years, the cryptocurrency world has been on the wild, and prices have risen rapidly and rising rapidly. Although some investors have made astronomical returns, many others have lost a considerable amount of money due to poor time and improperly informed decisions. In this article, we will go into the world of cryptocurrency market cycles and explore what they mean investors.
What is the market cycle?
The market cycle means natural fluctuations that occur over time in any financial market. These cycles can be influenced by various factors such as interest rates, economic indicators, technological achievements and global events. In the case of cryptocurrency markets, several main players are shaping the trend:
- Central Banks
: Central banks are responsible for determining monetary policy, which can have a major impact on cryptocurrency prices.
2.
3.
5 to 10 years of market cycle
Cryptocurrency markets run a natural cycle, which lasts between five and ten years. This cycle consists of three phases:
1
- Lyddle (-3 to -5) : Trend is decreasing as investors are becoming more cautious and prices are decreasing due to negative news, regulation problems or economic downturn.
- Recovery Ball (YR 0-5) : The reference period when investors regain self-confidence and the market begins to grow again.
1 year market cycle
The one -year market cycle is influenced by short -term economic indicators such as GDP growth rates, inflation rate and employment rate. This cycle consists of three phases:
1
- LESDE (quarter of 2019 to 2020 Q3) : Decreased trend as investors are becoming more cautious and prices decrease due to negative news and economic problems.
- Restore Ball (2020 Q1-Q2) : recovery period when investors regain self-confidence and the market begins to grow again.
6 to 12 months market cycle
The market cycle of six or twenty months is influenced by long -term macroeconomic trends, such as changes in interest rate, economic indicators and global events. This cycle consists of three phases:
1
- Class (2020 Q1-Q2) : Diminishing trend as investors are becoming more cautious and prices decrease due to negative news and economic problems.
- Restore (2020 Q3-Q4 to Q1-Q2 2021) : The reference period when investors regain self-confidence and the market begins to grow again.
24-36 months market cycle
The two or three years of market cycle is influenced by long -term macroeconomic trends such as changes in interest rate, economic indicators and global events. This cycle consists of three phases:
1
- Lydible (Q1-Q2 2021) : Trend is reduced as investors are becoming more cautious and prices decrease due to negative news and economic problems.
3.
What can investors do?
Understanding the market cycles is very important in making reasonable decisions on investing in cryptocurrency space.