What To Know About Cryptocurrency Market Cycles

Cryptocurrency: Understanding market cycles

The world of cryptocurrencies has been on wild driving in recent years, with prices rising and collapsing in rapid succession. While some investors have achieved astronomical returns, many others have lost a significant amount of money due to bad timing and poorly informed decisions. In this article, we dive into the world of market cycles of cryptocurrencies and examine what they mean for investors.

What is a market cycle?

The market cycle refers to natural fluctuations that occur over time on any financial market. These cycles can be affected by various factors such as interest rates, economic indicators, technological progress and global events. In the case of crypto markets, several key players form a trend:

1.

• Innovation in blockchain technology : The development of new technologies of blockchain and cryptocurrency is the main driving force of market cycles.

3
Global economic trends : Global economic indicators, such as GDP growth rates, inflation levels and commercial balances, may affect cryptocurrency prices.

5-10-year-old market cycle

Cryptom markets follow a natural cycle that covers more than five to ten years. This cycle consists of three phases:

1.

• Country (Yr -3 to -5) : Declining trend when investors become more cautious and prices fall as a result of negative reports, regulatory concerns or economic decline.

• Rebound (YR 0-5) : The recovery period when investors regain confidence and the market begins to grow again.

1-year-old market cycle

The one -year market cycle is influenced by short -term economic indicators such as GDP growth rate, inflation level and employment rate. This cycle consists of three phases:

1.

• Country (Q4 2019 to Q3 2020) : The rest of the trend when investors are increasingly cautious and prices are falling as a result of negative news and economic interests.

• Rebound (Q1-Q2 2020) : The recovery period when investors regain confidence and the market begins to grow again.

Market cycle 6-12 months

The market cycle of six to twelve months is influenced by long -term macroeconomic trends such as interest rate changes, economic indicators and global events. This cycle consists of three phases:

1.

• Trough (Q1-Q2 2020)

  

  : The rest of the trend when investors are becoming more and more careful and prices are falling as a result of negative reports and economic interests.

• Bumping (Q3-Q4 2020 to Q1-Q2 2021) : Recovery period when investors regain confidence and the market begins to grow again.

24-36-month market cycle

Two to three years the market cycle is influenced by long -term macroeconomic trends such as interest rate changes, economic indicators and global events. This cycle consists of three phases:

1.

• Country (Q1-Q2 2021) : The rest of the trend when investors are increasingly cautious and prices are falling as a result of negative news and economic interests.

3.

What can investors do?

Understanding market cycles is decisive for taking informed investment decisions in the cryptocurrency.