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The impact of market mood on the results of trade in Cripto
Cryptocurrency currencies have become popular in recent years, and their prices are known for being very unstable. One of the key factors affecting trade results in cryptocurrency is the mood of the market. In this article, we will examine how the market mood affects the trade of the cryptographic van and discuss its impact on investment decisions.
What is a market feeling?
The market mood refers to the common mood or mood of investors in accordance with a specific supply class, bonds or assets. This is influenced by various factors, such as economic indicators, information and opinions of investors. In the context of cryptocurrency currency, market feelings can be divided into three types:
- speculative feeling : Investors buying cryptocurrency currencies in the hope that they will earn quick money from price changes.
- Institutional mood : Institutional investors, such as hedge funds, pension funds and family offices investing in Cripto currency for diversification or market participation.
- Main sentiment : Individual investors looking for short -term profits or guessing cryptocurrencies on the market.
how the market mood affects the results of trade
The market mood can significantly affect the results of trade in Cripto currency in several ways:
- price variability : The sense of level affects the price movement by increasing or suppressing. For example, the mood on the market (e.g. a sales signal) can lead to a sharp price drop, while the bull market (e.g. purchase signal) can cause a rapid price increase.
- Risk tolerance
: The sense of level affects the risk of investors. When feelings are negative, investors may be more susceptible to risk and invest less often in cryptographic currency, which leads to lower trade and price.
- Trade strategy : disturbed available impact on investment decisions adopted by traders. For example, the mood on the bear market may indicate dealers to sell their positions, while the opinion of the bull market may cause them to buy them on the market.
- Diversification of the portfolio : market distribution may affect the diversification of the portfolio. When investors are optimists about cryptocurrencies, they can assign greater capital to this property, which leads to an increase in the amount of trade and price.
Case studies: how the market mood affects the results of trade
Several cases of cases show how the market mood affects the results of trade in cryptocurrency currency:
- Bitcoin (BTC)
: In 2016, the Bitcoin price increased rapidly from around 600 USD to over $ 19,000, guided by the speculative feelings that grew, while investors were looking for alternative investments.
- Ethereum (ETH) : In 2017, the price of Ethereum increased from around USD 200 to over 4,900 USD, under the influence of institutional feelings, which included investment companies, such as Circle and Andressen Horowitz supporting the project.
risk of relieving market feelings
To alleviate the risk of market feelings in cryptocurrencies, traders can use various strategies:
- diversification : investment in many CRIPTO currencies to reduce exposure to any property.
- position size : Limit the size of position management and maintaining a coherent investment thesis.
- Risk management : Pstopy expenses, limited orders or other loss of loss risk management techniques.
- Investment thesis : develop an investment thesis that takes into account the market mood and adapt trade strategies accordingly.
Application
The Moody market plays a significant role in shaping the results of trade in cryptocurrencies. Although speculative feelings can lead to fast prices, institutional available can affect long -term trends.
