The cryptocurrency market is characterized by sharp fluctuations over time, and we usually notice that it goes through different stages that affect the overall price movement. Among these stages is what is known as the “sideways market”, which occurs before a strong upward wave known as the “Bull Run”.
What is meant by transverse movement?
A range is a period when cryptocurrency prices move within a narrow range, meaning that prices are moving between a specific support and resistance level without a clear trend upward or downward. During this period, trading is relatively quiet and there are no strong trends in the market, which means that traders are unsure of the next direction.
Why does the transverse motion occur before the pulsar?
There are several reasons why lateral movement is an important indicator of the pre-urinary stage:
1. Liquidity Accumulation: In consolidation phases, large investors (whales) accumulate as much currency as possible at low prices before the strong upward movement begins.
2. Market Correction: After any stage of sharp rise or fall, the market needs a period of calm and correction, during which prices return to their normal levels before starting to rise again.
3. Uncertainty: Small traders are in a state of anticipation and waiting for any indication of the market direction. This increases the sideways trading movement due to hesitation in making buy or sell decisions.
4. Prepare for a Bull Run: After a long period of sideways movement, there is an increased chance of new liquidity entering the market by investors who see an opportunity to invest at low prices.
What are the most important signs that indicate the end of the transverse movement?
1. Increase in trading volume: When we notice an increase in trading volume while maintaining the same price range, it may be an indication of the beginning of an upward movement.
2. Breaking the resistance level: If the prices manage to break the upper resistance level and hold above it for a while, this is considered a strong signal for the start of a bull run.
3. Improved market sentiment: In a sideways movement phase, market sentiment is somewhat negative or pessimistic. If sentiment changes and we start hearing positive news and increased media attention, it could be an indication of the beginning of a bullish trend.
4. Technical signals: Technical indicators such as the Relative Strength Index (RSI) or moving average crossovers can provide early signals that the sideways phase is about to end.
How can traders benefit from the sideways phase?
1. Collect coins at low prices: This stage is considered an excellent opportunity to collect coins at low prices before prices start to rise.
2. Technical Indicators Analysis: Focusing on technical indicators and market news helps traders make sound decisions in the pre-bullish phase.
3. Avoid emotional decisions: Because the sideways movement phase is characterized by price fluctuations without a clear direction, it is important to avoid making emotional decisions that may lead to losses.
Conclusion
The sideways movement in the cryptocurrency market is considered an important stage before the start of the bull run. It represents a period of calm and anticipation by investors, giving them the opportunity to analyze the market and accumulate coins at reasonable prices before the start of the strong bull run. Focusing on technical signals and increasing trading volume helps in determining the end of this stage and preparing to enter the bull run properly.
