As a seasoned crypto investor with battle scars from the 2017 bull run and the 2022 FTX fiasco, I can’t help but feel a mix of anticipation and apprehension when I see the current market trends. The sell-side risk ratio dropping suggests that we might be nearing the end of profit-taking, which could potentially lead to increased volatility reminiscent of 2019 – a rollercoaster ride that I’ve been on before and wouldn’t mind experiencing again… from the safety of my couch.
In simpler terms, the instability in the cryptocurrency world remains evident, with Bitcoin‘s risk indicator (measuring profits and losses compared to market size, signaling possible increased volatility) showing a significant drop over the past few days.
As per a post by well-known crypto market analyst Kyle Doops on social media platform X (previously known as Twitter), the recent decrease in Bitcoin’s sell-side risk ratio implies that profit-taking might be about to wrap up, potentially leading to heightened price volatility reminiscent of 2019.
The Sell-Side Risk Ratio compares actual earnings (profits and losses) to the market’s scale. High figures indicate substantial profits or losses, implying volatility in the market. On the other hand, small values imply a balanced state. A recent drop towards the lower limit suggests that most coins are close to breakeven, indicating a relatively stable market situation.
— Kyledoops (@kyledoops) September 10, 2024
Currently, the cost of the leading cryptocurrency, Bitcoin, is just below $57,000. Previously in late April, its trading value surpassed $64,000. However, this month has seen a substantial drop in price as low as under $53,000 due to a major sell-off, causing the market to reach a state of “extreme fear.
The Crypto Fear & Greed Index, a measure that reflects investor sentiment and market attitude, dipped to 22, but then began to rebound. The index hit a record low of 6 when Bitcoin’s price fell below $18,000 in the year 2022, following the downfall of the well-known cryptocurrency exchange FTX.
A trader, whose identity remains unknown, has successfully earned over $10 million by predicting volatility increases this month, an event that seems to be hurting the cryptocurrency market. Interestingly, data from CCData suggests that the September Effect, a pattern observed in traditional markets, is also applicable to cryptocurrencies. On average, Bitcoin’s performance during September, from 2010 to 2023, has shown a negative return of approximately 4.5%.
In our latest Chart Analysis, we delve into Bitcoin’s performance spanning from September 2010 to the year 2023. Interestingly, while past events don’t always reoccur, it’s worth noting that September has often been a challenging month for Bitcoin, with only six instances of positive performance during this period in its entire history.
— CCData (@CCData_io) September 3, 2024
For the past 13 years, Bitcoin’s price has increased only six times during the month of September, while April, November, and October have historically yielded an average return of approximately 35.6%, 39.2%, and 28.7% respectively.
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2024-09-12 04:46