Cryptocurrencies are no longer an entirely novel asset, but they’re not fully part of the mainstream marketplace either. Over the last year, the price has been growing more and more, with the value consolidating and taking the price points to new heights. The fact that the market is so robust hasn’t gone unnoticed, and more investors than ever have been interested in joining the ranks of digital assets as a means of diversifying their portfolios. Notably, institutional investors have started investing in crypto more than ever before, a move that signifies that the market has become much more trustworthy in the eyes of the average trader.
Not long ago, this would have seemed almost unthinkable, as cryptocurrencies were regarded as too risky to drive any real value. But as the regulatory landscape has become clearer, it was also plain to see that the marketplace itself is becoming more mature and that its potential to create wealth increases as well. However, that doesn’t mean that doesn’t mean that having a strategy doesn’t matter anymore. Checking the volume, price shifts, and the Solana to USD values (more investors than ever are looking to broaden their portfolios by investing in altcoins).
The Overview
When the fourth quarter begins, the crypto market picks up speed. Starting in October, historical data indicate that the ecosystem tends to exhibit consistent performance during this time of the year, a lot of it revolving around recovering from the losses of August and September. This year is somewhat different because September was actually not as challenging for crypto. Many expected that to mean that October would be even stronger than in the past, but they seemed to be proven wrong as a massive liquidation event unfolded.
However, things changed once again as this black swan event didn’t lead to massive corrections and value losses. In fact, some were expecting to be in deep red territory as a result, but this didn’t take place. The markets have been holding on and continue to do so, as there are no strong hints that a massive bear market is approaching. The capitalization level recorded a quick rebound as well, cooling off a little bit in the aftermath, but not by a huge margin. The current bull run resembles those of 2017 and 2021, but is also different from them in some key ways.
One of the most important things is that those rallies were influenced by external factors like the ban on mining in China or the hype that surrounded initial coin offerings at the time. The current setup is entirely structural, though, leading to the repricing of risks and the possibility of rethinking what’s working and what isn’t in the marketplace.
Volatility Remains
Even though the marketplace is definitely more stable nowadays than it used to be, fluctuations and volatility remain an issue. Over the last few years, the appetite for risk and potentially hazardous trading endeavors (that carry the potential for huge returns, though) has decreased, as the macroeconomic conditions made investors much more careful and attentive with the way they use their money. The path that takes cryptocurrencies to new levels this time will most likely be volatile as well.
Market sentiment remains overwhelmingly positive, though, especially as exchanges and platforms are becoming more engaged as well, fueled by the renewed vigor of the general ecosystem. According to Binance.com Research, “we are committed to fostering a maturing crypto ecosystem where innovation, regulation, and security work hand in hand.” Being able to deliver a secure experience is increasingly sought after in the crypto world as well, as traders want the certainty that their capital is as safe as it could possibly be.
Price action will remain fairly sensitive to catalysts for the foreseeable future, so it’s important that traders keep up with the latest news before making any decision regarding their assets. But while near-term volatility is definitely to be expected, researchers say that being overly pessimistic is definitely not a good idea and that it will most likely not serve your portfolio. It could seem like the right call, especially if you’re a newcomer, as you’ll definitely want to be more careful and attentive (you’ll most likely not feel confident to act in any other way at this stage), but the de-escalation of tensions, liquidity repair, and policy easing will certainly dominate the ecosystem.
The Influences
Since the prices have grown so much, it may seem like the rules that formerly applied to marketplaces can no longer be considered when it comes to offering predictions. There’s no doubt that the market is changing, but some things will remain the same. The fact that October is the month when the market grows significantly still applies. Even if the price point goes on a downswing for a very short while, the market bounces back on its own shortly after, negating the losses.
Two years ago, Bitcoin climbed almost 30% around the middle of the month, while last year the market gained about 16%, also after October 15th. In 2020, Bitcoin secured an 18% increase during the second half of the month as well. Gold is rallying as well, the traditional asset BTC is most often compared to. Now investors expect that the capital will start rotating back into BTC, and that sooner rather than later.
The tariffs coming from the United States and the announcement that heads of state will meet to discuss trade impact the price action as well. Even though cryptocurrencies are known for being decentralized, they don’t exist independently of standard markets. As they’re becoming more involved in the world of traditional finance, the changes occurring in standard markets will naturally continue to impact digital assets.
If you’re looking to give your portfolio a boost, though, you should consider coming up with a robust strategy that will help you drive more revenue and minimize the losses. Consider what your long-term financial goals entail and move from there to come up with the best possible game plan.
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