Current Mood: Volatile, Somewhat Range Bound, and Undecided
The mood of the Bitcoin market changed since falling from $11.6k. Mood changes are common in crypto, and thus understanding them is important.
First, check out an article on “the moods of the market.” The general theory here is that crypto goes in cycles and waves, and each cycle carries with it a different mood, and each mood and cycle is reflected in the charts, across social media, in the media, etc.
The current mood is one of slight disinterest from the public, a bit of burn out in the crypto space (still a lot of fans, just the excitement of early January is dampened a bit), and ramped up activity from technical traders.
The result of the mood is volatility within a range (mostly the $8ks recently) and a bit of uncertainty to whether the trajectory is up or down (it can look up or down depending on the moment or day).
Here in late March 2018, the thrill of 2017 is gone, the horror of the January correction has subsided, the period of hope in which Bitcoin went from $6k – $11.6k is over, while a new period has begun.
The current market is dominated by technical traders and big money. Until that stops being the case, Bitcoin is likely to do what it has been doing. It has moved in a volatile and somewhat sideways direction in Elliot Waves, between Fibonacci retracement levels. Both its upward and downward movement has been spurred on in mere moments by trading bots with vast supplies of fiat or fiat substitutes. The second that both bots are on the buy or sell side, or the second one gives quarter, perhaps due to price and volume action at a specific support or resistance level, the price tends to fly.
The environment has a lot of room for rewards, but it is also full of risks.
It is full of excitement and potential, but it is similar to being at a poker table with pro poker players. It is potentially fun but dangerous unless you happen to be a pro who is good at not getting psyched out; even then, it’s still risky.
The problem we have here is an odd one, but a logical one.
In the world of investments and trading, HODLers are HODLing. Many traders who did well in 2017 have realized that trading a bull market is easier to work with. Average people are looking towards other investments as crypto is no longer moving up and up. And meanwhile, with the advent of things like futures and more stable coins paired with less volume from other traders, means speculators are better able to dominate the market.
There are other factors as well. Adoption of crypto and crypto tech is increasing. The technology behind coins is advancing. The market’s upward and downward movement is being slowed to some extent; it’s being bound within a range recently; which is healthy in its way. And states are embracing crypto.
We have a rather positive environment outside of the exchanges, but we have a somewhat hostile environment in the exchanges for those who aren’t technical traders. There have been an insane amount of traps, and only a few dips have been truly worth buying in BTC; the rest of the market is even tricker.
We also have a healthy looking market if one looks with greater perspective. While the volatility with the range crypto is trading in is intense, from a more distant point of view, the lack of epic upward and downward movement compared to December and January is more on par with what every other asset that has endured the course of time looks like.
And that brings me to my last point, this mood may not be all fun and games, or at least if it is it is more high stakes games than it once was, but it does feel slightly more mature, and that is a good thing.
That is the gist of how things look, to me at least, regarding the mood of late March in 2018. It will be interesting to see the next mood. Hopefully, that mood will include a dash more stability.