Cryptocurrencies, like any other type of traditional asset, despite being decentralized, are vulnerable to the ups and downs of the market; it is there that investors usually prepare to make the timeliest investments and get the most out of them.
It has not been the best year regarding positive figures for the crypto assets market. Instead, it has been evidenced as an aspect of the digital financial market being considered impenetrable and concerned with macroeconomic factors.
A situation many did not expect turned out to be that it violated the cryptocurrency market, leaving in its wake a large number of monetary losses where those who were perhaps affected in a more significant proportion were small investors. With this regard, you may want to consider knowing about the ways to secure cryptocurrency.
Crypto market cycles
Interestingly, the more investors prepare, the fewer risks are reduced, and the rates of return are maximized.
It is better to know the market in depth to understand each phase generated, thus being able to prepare for any circumstance, even if it is averse to the pre-established investment forecasts.
There is a pattern that not only applies to finance but also surrounds everything we do daily, and that is that in any applied science, a process can be analyzed through this tool, such as the entry and exit in a certain period in the financial investment markets, precisely that of cryptocurrencies.
This tool or pattern is commonly known as the bell curve; its name best describes its graphic representation; it has been used in the stock market by investors to identify the right time to make any investment or withdrawal from the market.
Just as it is used in the traditional financial market, the cryptocurrency market could not be an exception to its use, this graph has demonstrated its precision in many disciplines, and that is why it is taken as a reference to evaluate the cycles of the crypto market and its crypto assets.
There are 4 phases or cycles of the crypto assets market, which can be named as follows:
- The slow accumulation
- The rapid rise
- The maximum price levels
- The price drops
If digital currencies are characterized by something, it is to be cyclical, so this pattern is the one that adjusts to every one of the bullish and bearish periods that this new market has experienced.
The leading cause of losses in the digital financial market is that investors are unaware of the evolution of these cycles and often do not recognize them and make hasty decisions.
Understanding these phases will allow investors to decide when to buy or sell their crypto assets, maximizing profits and minimizing losses.
What to do while the bearish cycle passes?
Financial markets tend to have the same behavior. However, in the case of digital, it tends to be more volatile, so users control its financial instruments, and there is no regulatory body for it.
It is common for investors to see that when the price rises, there is a high demand, and everyone begins to buy excessively without knowing when it will reach its next ceiling level; the same thing happens, but inversely, when prices start to fall, everyone, they sell because they think the price will go to zero.
Market movements usually directly influence investors’ emotions and feelings; it is where self-control and timely and efficient evaluation of the market allow enthusiasm to be balanced when profits are obtained and fear when losses come.
Investors must become the allies of the trend; it is essential to remember that financial markets are usually profits for some and losses for others.
Bullish phase for 2024
During so much controversy about a quite shaky economy, the perfect opportunity arises to create forecasts that allow us to visualize what will happen in a certain period in this bearish case.
For example, the Co-founder of Huobi has predicted that the crypto winter will end in the year 2024-2025, while other analysts suggest that the crypto winter is nearing its end and may be the shortest in the history of the crypto asset market.
Although the market does not give much hope for a near end, everything depends on how the market evolves and the positions of its users and institutional investors.
The crypto-winter phase is not that it has lasted for a more extended period, but rather that the circumstances do not benefit the market, and this bearish phase seems like an eternity.