A market analyst, who did not want to be named, evaluated the recent declines in the crypto environment as follows: “We live in days of increased volatility in the crypto world. Particularly, the rapid declines in Bitcoin in recent days have also strengthened the emphasis on the ‘bear season’. Although Bitcoin is much more prominent as the most used and invested crypto money in the world, the decline in altcoins is much sharper. We also see decreases of up to 90 percent in some cryptocurrencies,” he said.
“The main reason for the declines is the FED”
Highlighting the Fed as the main reason for the decline in the crypto money market, analysts said, “One of the most decisive news sources in volatility is the Fed. The fact that the Fed has started to say more loudly that it will shrink the balance sheet is the primary reason for the downward movement in the markets.
Although there are comments that this movement may accelerate with the Fed’s active start to shrink the balance sheet, I generally think that this expectation has been bought by the market and today’s movement is basically a part of this expectation. This is also the opinion of many reputable financial institutions. But we are in the days when it is difficult to predict market movements in the short term and the foresight decreases.”
“Cryptocurrency technology is now a reality of today’s world. A currency revolution in the economy that has made its validity accepted by the entire system today. And we are only at the very beginning of this revolution. It has been only 13 years since Bitcoin entered our lives. Most crypto assets in the wallets of investors today did not exist 2-3 years ago.”
“News-driven drop-offs are now less”
Pointing out that the declines have decreased due to the news that caused speculative movements in the market, the expert says:
“The effect of news driven declines is also decreasing day by day in the market. Yes, 10-15 percent drops can really have a negative effect on wallets, but we should also remember that the same or similar news triggered 40-50 percent decreases in the past. A similar situation applies to periods of uptrend. While in the recent past, positive news from the USA, China or a corporate company affected the market very seriously, this effect is much less now. In a broad perspective, this is an indication that cryptocurrencies are accepted in the market as an investment tool. It is possible to confirm this situation from the number of users on a global scale and the total transaction volume.”
“Short-term forecasts cannot be made”
It is very difficult to predict in the extremely volatile cryptocurrency market. Therefore, although it is very difficult to make price-based forecasts in the short term, I think that blockchain technology and crypto assets will become much stronger in the coming period and strengthen their place in the world economy. What we are going through right now is like a birth pang. These pains have been repeated for a while, we will continue to see similar pains or rapid rises in the market.”
“In this process, it is useful for investors to be very careful. First of all, stock market choices are very important. I recommend them to trade in high-security, investor-friendly exchanges. On the other hand, too many manipulative accounts have emerged, especially on social media. It is very important for everyone to calculate their own risk without trusting anyone 100 percent.
Technical analysis doesn’t always work; It should not be forgotten that there are many factors that trigger the downward and upward movements. Therefore, the most important issue in individual investments is to make the right risk-return targeting. Knowing how to take profits on rises and using stop-loss as part of individual risk management are important elements of today’s cryptocurrency literacy.
“Post-pandemic Fed’s increase in liquidity and direct cash support to households led individuals to the Coin market. In the current situation, there is a decline in cryptocurrencies due to the curtailment of liquidity. It is just an unfounded assumption to suggest that the Fed is behind Bitcoin, because the Fed’s Global Markets and all currencies are also adversely affected by the liquidity reduction.”
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