Is the Bull Market back?

Let’s Dive Into It!

Bitcoin and Crypto Market Updates (Oct 30th)

After a nice consolidation over the weekend the scenario continues heating up. Checking into the Big Caps Index we can appreciate how the ascending triangle continues pushing for the breakout over the main horizontal resistance. If manages to breach and consolidate over the $510 range the bullish reversal would be fully confirmed:

Meanwhile the DEX Index continues pushing too. After breaching up the main downtrend resistance is now consolidating into the bull pennant matching with the local resistance on the $5 range. Again, a breakout over this level would confirm the full bullish reversal:

Coins indexed: UNI, CRV, SNX, CAKE, RUNE, 1INCH, LRC…etc

Layer 2 Coins also heating up, after the main breakout on the downtrend resistance are consolidating nicely. But I would be cautious here for now. The $1,7 resistance it’s strong as you can see, breakout and consolidation over it would confirm the bullish reversal:

Coins indexed: MATIC, OP, IMX, LRC, MINA, ZRX…etc

Ripple CEO criticizes former SEC Chair Jay Clayton’s comments

Ripple CEO Brad Garlinghouse strongly criticized former United States Securities and Exchange Commission (SEC) Chair Jay Clayton’s remarks regarding the agency’s regulatory approach. Since the first quarter of 2023, the SEC has initiated various regulatory actions against crypto exchanges and companies.

During an interview with CNBC on June 29, 2023, Clayton expressed his view that the SEC should pursue legal action against specific companies only when they have strong legal grounds. He emphasized that regulatory agencies should introduce regulations and legal cases they believe will successfully withstand judicial scrutiny.

UK publishes Final Proposals for Crypto Stablecoins regulation

The U.K. government published its final rules for the crypto ecosystem, saying it plans a phased introduction of regulation, with legislation for fiat-backed stablecoins being introduced early next year.

Other crypto areas, such as algorithmic stablecoins, will follow as the government brings activities like lending and trading into the fold of conventional financial regulation, according to an update published Monday. These rules will bring relevant activities under the purview of the Financial Conduct Authority (FCA).

The plans are in line with an April 2022 policy set out by Rishi Sunak, then finance minister and now prime minister, to make the U.K. a crypto-asset hub and are likely to be welcomed by an industry that has complained the government has been dragging its feet.

SBF Throws Caroline Ellison Under Bus in Testimony

Sam Bankman-Fried doubled down Friday on the narrative that the FTX crypto exchange failed due to mistakes rather than malfeasance and that his underlings made the major bungles in his first day testifying before jurors.

For example, he told the court he had asked Alameda Research, the hedge fund he founded with close ties to FTX that was run by his on-and-off girlfriend Caroline Ellison, to hedge its risks.

However, when asked by his defense lawyer in the criminal case whether Ellison heeded his advice that Alameda should “get shorter” to mitigate its risks and shrink its multi-billion-dollar hole, Bankman-Fried replied tersely, “no.”

The fallen crypto mogul, who stands accused of fraud and conspiracy, began his testimony in front of jurors Friday by saying he made mistakes at his now-fallen crypto behemoth FTX — the biggest being not employing a risk manager — and “a lot of people got hurt.”

Dealing with volatility

The frenzy of market volatility is a familiar component of the financial markets and sticks very hard in crypto. The sharp rises and falls of digital assets can easily stir unease, prompting many investors to reconsider their long-term strategies. For both newcomers and seasoned investors, the inclination to step aside and wait out turbulent periods can be really compelling. But the truth is, volatility within the crypto market is an anticipated part of the journey, just as it is in traditional financial markets.

Similar to how traditional markets sway, the cryptocurrency domain is subject to rapid fluctuations. Attempting to predict or time these movements can be immensely challenging, and many corpses pile in the pursuit of the goal. Thus, adopting a long-term investment vision and ignoring short-term upheavals might offer a more stable approach for many souls.

However, even for long-term crypto investors, understanding how to navigate through market volatility is crucial. Let’s delve into some insights and strategies that can assist in weathering these fluctuations.

The Nature of Volatility

Volatility is a statistical measurement of how swiftly prices can sharply ascend or plummet within a brief period. This volatility is typically measured through statistical concepts such as standard deviation, denoting the extent of price variations over time.

Similar to traditional markets, volatile crypto markets exhibit wide and rapid price fluctuations alongside heavy trading. The triggers for such turbulence can vary widely — ranging from economic releases, news about specific cryptocurrencies, endorsements from influential figures, to unexpected shifts in earnings, and a long etc.

Psychological Factors and Volatility

Many argue that volatility can surge due to psychological drivers, where investor reactions are influenced by collective shifts in sentiment. This stands in contrast to the efficient market hypothesis, which asserts that market prices instantly adjust to encompass all available information.

This behavioral perspective emphasizes that significant price shifts (volatility) result from the collective psychology of the investing community. Although the root cause of volatility remains a matter of debate, acknowledging its existence prompts investors to devise strategies to confront it.

The Psychological Struggle of Sidelining

The most prevalent advice for handling volatile markets is to remain invested and not be swayed by short-term fluctuations. However, witnessing a substantial decline in your crypto portfolio during a bear market can be emotionally taxing, testing the resolve of even the most seasoned investor.

For long-term crypto investors, the key is to stay composed and adhere to the chosen strategy, particularly one rooted in a well-diversified and sound investment plan. It’s vital to understand that even in the crypto world, market movements can be propelled by the fundamentals and events related to it, such for example on BTC a halving event, regulations in influential countries or the approval of an ETF as few examples for current times.

Choosing the Right Strategy

There is no perfect sauce that works for everybody in the financial markets. But usually there are some guidelines that can be more or less adopted and guide towards some good places.
Having exposure in the long term with some investments while executing in the short one usually is a good balance that should help you feel connected with the markets.
How you operate is gonna be very related to your own personality and will depend greatly on your patience, your risk tolerance and your self control, specially the capacity you might have to be consistent and disciplined.

Making Informed Decisions

Whether to buy, sell, or hold during market volatility is a critical decision. Specially for long-term crypto investors, these periods can provide opportunities to accumulate more digital assets at lower prices, thereby lowering the average cost per investment. Similarly, utilising hedging positions like protective measures to limit potential losses could be considered, anything for reducing your risk exposure and respect the golden rule of capital preservation, but in a way different of being sidelined and risking to miss out and confront regret and other psychological challenges that could lead you to make mistakes and deviate from your plans.

Final Thoughts

Volatility demands resilience and a long-term perspective. Amidst the turbulence, staying committed to a well-researched investment plan and understanding the psychological impacts of market swings are essential. Despite the challenges, maintaining a composed stance during times of volatility can be the cornerstone of long-term success.

Be strong and see you next week!

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