Letâs briefly analyze the economic situation of the crypto market, to provide some calm and clarity amidst the storm.
The first thing I want to clarify is that the trees are blocking the forest.
Everything is falling, that's true. And many will say that it's because of the #FED and the interest rates, the war, the US elections, among many other things.
Of course, macroeconomic data and the political situation have an impact on prices, but have anyone thought about this: Where do we come from?
So far this year, $BTC has practically doubled its price, opening the year at around $42,000 and reaching new highs of $74,000 between March and May. But let's go back further, to January 2023, when the price fell to $16,000 and since then began a bullish rally that lasted almost a year and a half without stopping.
Don't you think it's normal that after rising 350% from 16k to 75k the price should correct?
When we buy, we do so expecting to sell it at a higher price, it is the most normal thing. Everyone takes profits and the current margin is too large for large institutions to continue selling at a profit.
And if you thought the party would last forever, I'm here to burst your bubble. However, it's not the end of the world, this is the time to celebrate.
They already missed the opportunity to buy at 16K, at 30K and felt that the price was getting away from them at 70K... Well, let's analyze this fall a little.
Reasons for falling:
We already mentioned that the main reason for the stock to fall is that someone bought it and is currently making a profit. Common sense.
BTC belongs to a marginal sector for institutional capital, it falls within the "Technology" category. That is why it maintains a behavior quite similar to indices such as the S&P500 and Nasdaq, the indices that group the main technology companies.
In times of instability, risky assets tend to be sold in order to seek refuge in safer ones, such as Gold, bonds, shares of manufacturing companies, etc. Therefore, it is expected that both the indices and the Crypto market will suffer a setback.
Is September bad? Hmmm... Around this time of year two major phenomena occur on the stock exchanges: the first is the presentation of profits by companies (even investment companies) and the second is the profit taking of the second half of the year. Again, everyone takes profits at some point during the year and the second half of the year, along with the end of the year, are such moments.
The FED and monetary policy: Every economic decision has a lag of between 3 and 6 months, or even longer, to have an effect on the general economy. That is why a rate cut will give us better results, but in the following months, not now. Those who have the money know this and these are the moments they use to take profits (causing the price to fall) and take positions in other assets (buying the fall and accumulating for when the market starts to rise).
The news:
There are very few genuinely important news stories. In general, they only serve as catalysts for trends that are already underway.
Let's take the BIG ETF NEWS as an example! Wasn't BTC in a mega rally that started at 16k when that news came out? Of course, the market was filled with euphoria, so they bought everything, institutional capital took profits and positioned themselves again for the next rise.
Now the cycle repeats itself.
A key moment:
The conditions are in place for this to end as an accelerated correction, not a market crash.
Currently, most Altcoins are in strategic accumulation zones. Seen through market structure analysis, many Altcoins are reaching the bottom, where accumulation begins and the rise begins.
If BTC were to continue falling, dragging the market down, many coins would unleash a cascade of liquidations, breaking their current structure.
So, and this is a totally personal opinion, we are very close to the bottom.
Why is this moment key?
When everything falls we must make decisions about our investment future.
Ideally this is coming to an end, but it could fall even further, even a little further.
However, with a bear market we must decide whether to start accumulating, allocating a percentage to those projects that we believe will recover, saving capital in case of a future fall.
If you are "stuck" and in a loss, it is a great time to learn, not to cry and sell at a loss. If you bought high, are you going to sell low or are you going to buy low? These moments lead us to make decisions.
Acts against the majority:
In general we have to be very cynical, in a bad way.
When everything seems rosy, the news is excellent, it seems that it can only get better and the whole mass is euphoric, feeling that the opportunity is slipping away, suspicion.
The same thing happens when the crypto apocalypse is approaching and the future seems tragic. We are filled with news of bankruptcies, exchanges going under, networks on the verge of collapse and miners going bankrupt... It reaches a point of absolute fear and suddenly there is no news anymore.
In short, you were manipulated. Through price action and through news.
That is why it is often necessary to go against the masses, because they use it to take away their liquidity. They make them buy expensive (then the price falls) and sell cheap, where they accumulate.
Conclusions:
Don't look for strange reasons to know what is happening or why it is falling. It is just the market fulfilling its cycles, something it has been doing for decades.
There may be a few more drops, but there is no need to panic. Take your time and make good decisions.
Don't trust anyone, not even me. Get trained and learn to navigate this chaotic ocean, dominated by whales and sharks.
No one has a crystal ball, even if we wanted to foresee everything, something will always slip through the cracks, so manage your capital and risk wisely.
I hope I have helped you!! If so, leave it in the comments.
Crypto Citizen says goodbye. I wish you a good day full of profits.
