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cryptocurrency: Understand market cycles
The world of cryptocurrency has been on a wild trip in recent years, and prices rise and crash into rapid succession. While some investors have obtained astronomical yields, many others have lost significant amounts of money due to bad weather and poorly informed decisions. In this article, we will deepen the world of cryptocurrency market cycles and explore what they mean for investors.
What is a market cycle?
A market cycle refers to natural fluctuations that occur in any financial market over time. These cycles can be influenced by several factors, such as interest rates, economic indicators, technological advances and global events. In the case of cryptocurrency markets, several key players shape the trend:
- Central banks : Central banks are responsible for establishing monetary policies, which can have a significant impact on cryptocurrency prices.
- Innovations in Blockchain technology : The development of new technologies and cryptocurrencies of blockchain is an important promoter of market cycles.
- Global economic trends : Global economic indicators such as GDP growth rates, inflation levels and commercial balances can influence cryptocurrency prices.
The market cycle of 5 to 10 years
Cryptocurrency markets follow a natural cycle that covers more than five to ten years. This cycle consists of three phases:
- Pico (year 0-3) : A strong ascending trend in the price of cryptocurrencies, often driven by greater adoption and conventional recognition.
- CIERO (YEAR -3 A -5) : A downward trend as investors become more and more cautious and prices decrease due to negative news, regulatory concerns or economic recessions.
- Rebound (year 0-5)
: A recovery period as investors recover confidence and the market begins to grow once again.
The 1 -year market cycle
The one -year market cycle is influenced by short -term economic indicators, such as GDP growth rates, inflation levels and employment rates. This cycle consists of three phases:
- PEK (Q1 2020) : A strong rising trend in the price of cryptocurrencies driven by greater adoption and conventional recognition.
- Corhe (Q4 2019 to the third quarter 2020) : A downward trend as investors become more and more cautious and prices decrease due to negative news and economic concerns.
- Rebound (Q1-Q2 2020) : A recovery period as investors recover confidence and the market begins to grow once again.
The market cycle from 6 to 12 months
The market cycle of six to two months is influenced by more long -term macroeconomic trends, such as changes in the interest rate, economic indicators and global events. This cycle consists of three phases:
- PEAK (Q3-Q4 2019) : A strong upward trend in the price of cryptocurrencies driven by greater adoption and conventional recognition.
- Cercado (Q1-Q2 2020) : A downward trend as investors become more and more cautious and prices decrease due to negative news and economic concerns.
- Rebound (Q3-Q4 2020 A Q1-Q2 2021) : A recovery period as investors recover confidence and the market begins to grow once more.
The market cycle of 24-36 months
The market cycle of two to three years is influenced by long -term macroeconomic trends, such as changes in the interest rate, economic indicators and global events. This cycle consists of three phases:
- PEAK (Q3-Q4 2020) : A strong rising trend in the price of cryptocurrencies driven by greater adoption and conventional recognition.
- Cercado (Q1-Q2 2021) : A downward trend as investors become more and more cautious and prices decrease due to negative news and economic concerns.
- Rebound (Q3-Q4 2021 A Q1-Q2 2023) : A recovery period as investors regain confidence and the market begins to grow once again.
What can investors do?
Understanding market cycles is crucial for making investment decisions informed in cryptocurrency space.