Is bitcoin really overbought, as market gurus put it? Will volatility increase with the arrival of large depositors and the launch of futures, which will reduce the rate? Or, conversely, will they reduce the sharpness of cryptocurrency jumps by 20-30%?
You can constantly ask these and other questions, which almost every day tear the media space apart.
Another option is to apply technical analysis of the markets and trading schemes based on it, which summarize all available information and chart signals.
Technical analysis plays a key role at the moment when it comes to cryptocurrencies and tokens issued during the ICO process. It is problematic for them to find the starting information for conducting fundamental analysis: there are quite a few companies reporting in this area. Technical analysis is ideal for short-term and utilitarian trading strategies.
Crypto winter is close
Since January 2022, the crypto winter season has begun on the electronic money exchange. So, November 2021 was marked by the cost of bitcoin at 69 thousand. dollars, and at the beginning of 2022, it was already worth 37.2 thousand dollars. Such a drop was predicted by the authors of the Messari reporting. For all the time of its existence, the crypt has experienced two falls - 2013-2015 and 2017-2018.
In such crises, depositors are at particular risk due to the lack of full-fledged tax planning. Periods are dangerous because at this time you can overlook profitable projects and lose sight of the potential of bitcoin in the long term.
Messari's reporting authors do not recommend immediately purchasing cryptocurrency at an understated price, since the rate can always move even lower and remain in such a position for a long time. It is advisable to make each transaction with crypto carefully so as not to go to a loss before it recovers its value.
Analysts suggest that there are also advantages in the crypto winter - during this period, non-competitive and unprofitable projects will leave the market.
What will inflation affect?
The coming inflation will affect regulators in the US and Europe. Governments will strengthen financial leverage by raising rates. There will be no other way – inflation in today's conditions causes the greatest public worries, and this means that other alarming signals, including the risk of recession, will be ignored and taken into account in the second, or even third stage. Thus, the volume of liquidity in trading will be significantly reduced.
Many experts already suspect that decades of excessively loose monetary policy have created a bubble in financial assets, and its deflating will be unprecedented in history.
And, of course, this will immediately affect the exchange of digital currency. Here the fall will be the strongest, despite the fact that the value of bitcoin is constantly being questioned.