Market Structure: A Key To 10x Your Profit As A Crypto Trader
26 Octobre 2022 - 8:00AM
NEWSBTC
Trading crypto in the bear market is one of the most difficult
times for most traders, including advanced traders, but as the
saying goes, the bear market produces the best traders, and
millionaires are born. Trading without the proper skills, such as
market structures of the crypto market and implementing your
strategy, is akin to exposing yourself to risk, which could cost
you your life, but in this case, your trading portfolio. Trading
goes beyond buying and selling based on the feeling that this is
the best time to buy or sell an asset. Understanding the market is
in phases or cycles gives the trader, investors, and institutions
an advantage to trade with the necessary edge and the technical
tools needed to produce a great return on investment (ROI) over
time. Let’s look at how most traders, investors, and institutions
take advantage of the different phases or market structures to
produce consistent profits and use the right tools to identify
these different market structures. Related Reading: Bulls
Against The Ropes, Why Aptos Is At Risk Of Crashing To $7 What Is
Market Structure The market structure, also called market
cycles or phases, is a given stage or framework at which the crypto
market is currently trading. Understanding the current market
structure helps a trader to condition trading techniques and
strategies to yield the best results. The market structure
highlights important support, resistance, and swing highs and lows.
There are four common types of market cycles- accumulation,
distribution, uptrend, and downtrend phases; let us discuss them
with the help of the chart. Accumulation Phase: This phase forms
when their prices flatten after a long decline in price, which is a
potential market bottom. At this point, institutions, investors,
whales, and highly experienced traders begin to show interest and
buy these assets, considering how cheap the prices have become at
discounted prices. The accumulation phase is followed by a loss of
interest, disappointment, boredom, and a lack of trading
activities. Distribution Phase: This phase is characterized by
sellers dominating this market, creating mixed feelings after a
bullish uptrend. Prices continue to range in this region and can
last from weeks to months, with the market moving in the opposite
direction. This market is marked by price peak patterns- head and
shoulders patterns, double top patterns, or triple top patterns
with a subsequent sharp decline in price. This market phase is
dominated by combined emotions of fear, greed, and hope for the
market to continue its rally. Uptrend Phase: This market phase is
marked when cryptocurrencies start to rise in price after reaching
a stable point. Early traders, investors, and institutions that
recognize this phase start buying into great crypto assets, with
many hoping to make a fortune. This phase catches the attention of
media outlets, and many are carried away with feelings of euphoria
as they begin to FOMO (Fear of missing out) in a bid not to miss
out. Downtrend Phase: This phase is the most painful as traders who
bought during the distribution phase suffer great losses together
with inexperienced traders who are new to the crypto industry. Most
traders at this stage cut losses and quit trading. Identifying the
crypto market cycles will help you make good and better judgments
regarding trading and investment in crypto assets and 10X your
portfolio. Disclaimer: The following op-ed represents the
author’s views and may not necessarily reflect the views of
Bitcoinist. Bitcoinist is an advocate of creative and financial
freedom alike. Related Reading: Crypto Market Drops To Extreme Fear
As Bitcoin Struggles To Hold $19,000 Featured Image From zipmex,
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