Cryptocurrency market correction
Correction is usually defined as a 10% or greater decline in the price from its most recent maximum. Corrections can occur anywhere including currency markets, individual stocks, stock-following indexes, crypto markets or any asset trading on an exchange. An index, market or asset can fall into correction for various periods from 24 hours to months or even longer. However, it is important to mention that the average correction of the market is short-term and continues between three to four months.

To predict and track market rectifications, analysts, traders, and investors use charting methods. However, it is almost impossible to predict when a correction begins, finishes, or claim how tragic a decline in prices is until it's completely over. What specialists can do is to evaluate the data of past falls and act accordingly.

Leveraged, short-term or day traders can find a drastic correction catastrophic, especially during one trading session, however, it could also be healthy, adjusting overvalued asset prices and providing purchasing opportunities for those with a higher value. Additionally, these periods could be beneficial for those interested in investing or providing venture capital. Nonetheless, investors should always consider the risks as they could witness a further decline.

Due to market capitalization, smaller-cap, high-growth and constantly developing sectors like technology tend to be the least resistant to the correction process. Business cycle-proof, necessity-related and consumer staple stocks are more vulnerable. In other words, if a market rectification is caused by an economic downturn, these assets will still perform.

BTC example

If 40% of BTC's hash rate disappeared, it would be a significant decrease in the cryptocurrency and digital currency sector that is likely to confuse. Therefore, most cryptocurrencies still rely heavily on the price fluctuations of Bitcoin, even if it is short term.

After performing a technical analysis of cryptocurrency markets, experts argue that the recent downturn of the market was due to a decrease in the hash rate of BTC.

Consequently, bitcoin price fluctuations might cause the network to be more vulnerable to attacks. BTC latest sell-offs in September formed yet another monthly loss that made further price fall possible.

BTC has started to form a similar monthly trend to the one that took place from February to October 2018, whereby prices seek a solid support base of around $7,780 declining overall interest – as demonstrated by the lower highs and narrow price range of the last 3 months. Supposedly, this is a good chance to buy bitcoin or increase the volume of other tradings.

References and further readings:

https://www.coindesk.com/bitcoin-price-risks-further-decline-after-recovery-rally-stalls
https://www.coindesk.com/gold-not-bitcoin-is-drawing-haven-demand-on-us-recession-fears
https://cointelegraph.com/news/bitcoin-price-below-95k-could-spark-80-parabolic-advance-correction

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