The cryptocurrency market is not just a gathering place for transactions but also a stage for clear psychological cycles. The 'Altcoins Liquidity Index - 1M' chart reveals important signals for investors looking to optimize their trading strategies.
🌟 Understanding the Altcoins Liquidity Index:
• The Altcoins Liquidity Index measures the level of liquidity and cash flow sentiment in the altcoin market. This is a powerful tool that helps identify market trends, from accumulation to explosive phases.
• The chart shows the recurrence of the psychological cycle 'Euphoria' occurring every 230 days, often marking important price peaks.
📈 Market forecast:
• Highlight: The trend following each 'Euphoria' cycle is often a strong price correction, followed by a recovery and accumulation phase.
• The green arrow on the chart suggests new growth, which could herald an explosive period for altcoins in the coming year.
💡 How to leverage?
1. Monitor the cycle:
• Euphoria peaks often signal the market reaching a short-term top. Investors should be cautious and consider taking profits when similar signals appear.
• The 230-day period can be used to identify reasonable entry or exit points.
2. Technical analysis:
• Combine indicators such as RSI, MACD, and Fibonacci Retracement to identify support and resistance.
• Consider volume indicators to assess the strength of cash flow.
3. Risk management:
• Maintain a reasonable risk/reward ratio (R:R).
• Set Stop Loss to protect your account in case the market goes against predictions.
