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CRISIS IN THE WORLD OF CRYPTOCURRENCIES, THE IMPORTANCE OF THE PSYCHOLOGICAL FACTOR

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Author: @madridbg, through Power Point 2010, using public domain images. Allan Lau

Greetings and welcome dear readers of this prestigious platform, the topic that concerns us today is associated with the current scenario that has been taking place in the world of cryptocurrencies and how the selling pressure increases as the market seems to have entered in a new bearish contest.

If we review the charts of the main cryptocurrencies, we realize that the upward trend started in November and took us to historical highs in some assets, in the case of BTC we touched limits close to 70 K, however, beyond the euphoria of the bulls, this impulse seems to have ended, since the start of the year 2022 has been disastrous, where the price of BTC, the main asset associated with the crypto world, is trading around 36 K at the time of this publication, a figure that represents a drop of almost 50% of the asset in less than 3 months.

Fig. 2. BTC/USDT weekly time frame chart. Screenshot taken by @madridbg through the tradingview portal. tradingview

According to many analysts, the main cause of the fall in the price action is due in the first instance to the new restrictions imposed from Russia, where the mining of this type of asset is prohibited, at the same time, the increase in interests decreed by the United States, seem to have increased the panic in the market, producing a massive sale that has caused prices to fall precipitously.

According to analysts, there are various scenarios that are being concatenated to the point that the stock market is also in the red and it seems that the various events that Ukraine is facing continue to affect the world economy, without excluding the cryptocurrency market.

Undoubtedly, in the face of the panic situation, the selling pressure has taken over the users, which in a certain way shows us the levels of speculation that is handled on the crypto market in question and which It allows us to understand that BTC is still succumbing to global crisis scenarios, which is why, from my way of seeing things, there is still no act to be used as a value refuge that we highly consider.

In this sense, the fundamentals seem to hinder the work of bullish investors and although apparently the price of BTC has reached support zones around 34K, we have to continue waiting for the various order events world we are living.

Based on the foregoing, it is necessary to bear in mind that the market moves in an undulating manner and that falls can be assumed as investment opportunities. Unfortunately, when we see negative figures, we get carried away. by sentiment and we end up generating huge losses due to our desperation.

Therefore, it is essential to learn to control our psychological processes and even more so if we are clear about the levels of volatility that are handled in this type of asset.

  1. The design of the portal was made by @madridbg, using public domain images