Want to be Good at Trading Bitcoin? Check out How to Understand His Movement
Want to be Good at Trading Bitcoin? Check out How to Understand His Movement - Bitcoin price movements have been volatile for quite some time, so volatility can be said to be quite large. After the price broke the high of $64,888.99, but within 11 days, it might drop to $47.073.37.
This 27.5% drop indicates that Bitcoin has entered a bear market, at least in terms of the stock market.
However, unlike the stock market, bitcoin prices usually rise again after a deep decline. Even when there is a drop of more than 20%, there will be an increase above the price before it goes down.
This makes coindesk find a new definition of the movement of the Bitcoin market. There are two things to note to show that Bitcoin is moving in a bearish or bullish market.
The first is a decrease or increase in prices by more than 20%. Second, if within 90 days the price does not return to the highest or lowest price before the change occurred.
With these two definitions, Coindesk confirmed that Bitcoin is currently still in an uptrend because it has been in an uptrend for the last 407 days up to this week, since it first rose in March 2020 at the start of the Covid-19 pandemic.
In the absence of a consensus on the fundamentals or the macro correlations of cryptocurrencies, a cyclical analysis like this can be useful for investors looking to interpret market dynamics.
Aside from bullish and bearish movements, Coindesk also divides Bitcoin's 30-day volatility into three categories: low (<0.5), medium (≥0.5 and <1.0) and high (≥1.0).
This cycle is defined as the period during which the 30-day moving average does not move the 30-day volatility from one category to another.
From this experience, he found that the cycles of Bitcoin price action became much shorter in 2019 and remained relatively short compared to the period from 2014 to 2018, which tended to be longer.