Cryptomarket forecast 1st QTR 2021
For a set of cryptocurrencies, the start of 2021 brought a lot of all-time-high limit, which in turn led to massive of positive forecasts for 2021.
consider making a forecast for cryptocurrencies for at least a few months ahead, this extremely volatile market needs to be considered from 2 viewpoints at the moment:
- Emotional (behavioral economics);
- From the point of view of the study of price-interaction trading volumes.
1. Research the thoughts of customers.
The TOTAL index, which takes all cryptocurrencies under view, has risen by almost 1000 percent since the start of the pandemic panic in March 2020 .
Pay attention to the dynamics of growth relative to the increasing channel lines. The index has risen at a steady, moderate pace from April to December, being in the middle sector. But then there came the “explosion” and the development accelerated. The index moved to the upper zone and then, above the upper line, “went off the scale” entirely, entering an overbought state.
Google Trends also points to the fact that the economy is overheated. The world’s interest in the growth of Bitcoins, which was last seen in December 2017, is similar. People see that BTC has reached the memorable high of $20,000 twice and has theoretically undergone the intrinsic nature of the characteristic FOMO (fear of losing out) effect.
2. Analyzing volumes
Trading volume was 3.5 times higher than normal at the beginning of January! But what happens to the price? It has not drastically improved.
And why? The most possible reason is that the coins flow on a wide scale from professionals (who have not been afraid to buy crypto since March) to the mass of newcomers who have rushed under the influence of emotions to buy cryptocurrencies.
If so (I prefer to assume this based on data of not just Bitcoin historical reversals), then the industry is expected a culmination, and one of the lines of the ascending channel can be corrected on a wide scale in the future, followed by a recovery.
So that’s why the global strategy should, in my view, be as follows:
Ending of winter — beginning of spring - price correction. Then to capture the rebound with confidence in the continuation of the up-trend that has been existing by and wide since the very beginning of the life of Bitcoin.
