A disturbing rise in fear and uncertainty in the cryptocurrency market
As the world’s largest cryptocurrency exchange, Binance has been at the Center for Hot Discussions in the last few months. The sudden increase in the price of Bitcoin (BTC) has caused investors concerns that the market is experiencing a speculative bubble. This article will investigate a worrying rise in fear and uncertainty in the cryptocurrency market, as well as technical indicators and evaluation methods that experts use to assess its capabilities.
Factor of fear and uncertainty
Fear and uncertainty are obvious in the cryptocurrency market as many investors are not worried about the rapid increase in Bitcoin prices. The recent increase in prices has led some to question whether the market is experiencing an essential bubble or simply speculative. According to a survey of market research firm Etoro, 70% of respondents thought the current market mood was “too optimistic”, but only 25% thought it was “too pessimistic.”
The rapid increase in Bitcoin prices has also increased the market volatility, so many investors questioned the further price drop capabilities. Analysis of Coindesk Chart reveals a clear connection between price changes and investors ‘moods when prices decrease when investors’ confidence is low.
Technical Assessment: Key to Understanding Market Trends
Technical evaluation refers to the use of charts, graphs and other technical indicators to analyze market trends and anticipate future price changes. In the crypt market, technical evaluation is used to evaluate the potential of the bull or bear market based on various metrics such as moving averages, the relative strength index (RSI) and Bollinger bands.
One of the most widely used technical indicators in cryptocurrency markets is the relative strength index (RSI). Created by J. Welles Wilder, RSI measures the extent of the latest changes in price to determine overcrowded or resold conditions. When RSI falls below 30, it shows the potential bear market, and above 70, as indicates the upcoming bull running.
Economic Indicators: Take a closer look at the cryptocurrency market
In addition to technical evaluation, economic indicators play a crucial role in assessing the health of the cryptocurrency market. These indicators are used by experts to evaluate the overall market direction and acceleration.
One of the most widely used economic indicators is GDP growth rate. In recent months, several major economies have experienced significant GDP growth, so investors have believed the world’s economy was on the right path. However, this optimism was mitigated by concerns about inflation, interest rate and slowing down economic growth.
Another important indicator is the harvest curve. The steep harvest curve shows a strong bond market, while a flat or inverted harvest curve shows a weak bond market. In recent months, the yield curve has remained relatively smooth, so some have asked if it will change as interest rates will adapt to current trends.
FUD: Dark side of cryptocurrency markets
Despite the growing concern for the cryptocurrency market, there is still a community of prosperous investors who want to take a high risk of returning. This phenomenon is known as FUD (fear, uncertainty and doubt), which is characterized by negative comments about the market from various quarters.
FUD can damage the market, which increases volatility and reduces investors’ confidence. A Glasssnode study showed that FUD has a significant reduction in price changes in the last 12 months, with an average decrease in 20% per year.
Conclusion
The rise of fear and uncertainty in the cryptocurrency market is worrying as it may mean that an essential bubble will explode.