Upon us is the season of volatility in the financial markets.
Like every year at this time, the markets are making shifts that can throw investors off.
We caution you to beware, and only invest what you’re comfortable with losing.
None of this is personal, and none of it is happening without a good reason. Even stocks take a beating in the month of September, so you should expect this to leak into blockchain also.
The financial markets are, temporarily, becoming more volatile, but we haven’t even put crypto into perspective yet. According to Dow Jones Market Data, both stocks and Bitcoin will take a gradual but sure decline of 1.2%.
Consider this decline steady throughout the holiday season.
Since 1928, these trends have been found in the financial markets, and investors do support it.
If you’re feeling the pressures of changing-market conditions, then you’re not alone.
Here’s a better overview of what’s happening and how you can adjust.
A Season of Volatility In Coming Months
Let’s first keep in mind that cryptocurrencies aren’t controlled by central banks. In the traditional currency markets, banks can stabilize prices when they fall by buying more of their local fiat. They can even stabilize rising prices by selling large portions of their country’s currencies.
Without this controlling method in crypto, you should expect things to get bumpy.
We already know that September sets the tone for major shifts in the market, and much of that will linger into the holidays. Not only will institutions offer vacations to their people, but their holiday spending also takes money out of the market now into the new year. Get ready for it.
Add the Changing Federal Reserve On Top of It All
We encourage investors to be even more cautious in the coming months, for the Fed still hasn’t lowered interest rates. In some financial circles, the rumors are for a 75-basis point reduction, which is equal to .75%. However, most analysts see .25% to .50% as accurate targets.
For as long as interest drops and rumors about it dropping persist, the market will be uncertain.
With the USD still holding its place as the world’s-reserve currency, every bit of pressure it experiences will be felt by the entire market. This includes crypto, and as it happens, Bitcoin is now trading way below its August high of $65,000. The entire crypto market is now down …
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How to Adjust to the Market Changes
Crypto investors will want to closely follow market conditions in an effort to find stability.
Stable conditions are when stock and USD rises correlate with rises in Bitcoin. If you see divergence, instead, the more volatile prices become as confusion hits into investor accounts.
Confusion is one of the best descriptors for the coming months, and it’s due to volatility.
In a volatile market, the typical behavior of prices is up and then immediately down. Prices then move sharply down only to quickly rise. Finding trends will be more difficult, and though some investors WILL profit, these conditions, largely, lead most traders to lose money.
Be cautious, and only invest what you’re capable of losing.
