How to analyze the mood of the market for investment decisions in the CRIPTO currency
The world of cryptocurrencies has exploded in the last few years, with the price of bitcoin reached all the time and other property such as Ethereum and Litecoin that have experienced significant growth. Although many people have invested a lot in the Crypto currency, some investors are still not sure how to make informed investment decisions. In this article, we will explore the concept of market feelings analysis and provide step by step guide on how to analyze it for investment purposes.
What is the analysis of market feelings?
The analysis of market feelings refers to the study of investors’ attitudes, emotions and behavior towards a particular class of assets or a market segment. This includes data analysis such as the volume of trading, prices and news titles to evaluate the level of investor trust, expectations and risk tolerance. By understanding the mood in the market, investors can make more information decisions about their investment portfolio.
Why analyze the mood of the market?
Analyze your own emotions and bias when making investment decisions. Consider the following advantages of market feelings analysis:
* I improved decision -making
: Analysis of market feelings you will get a deeper understanding of the attitudes and emotions of investors, allowing you to make informed decisions.
* Reduced risk
: If you are aware of potential market risks or instability, you can adjust your strategy accordingly, reducing losses in the process.
* Increased trust : Market feelings analysis helps recognize the support area and resistance, providing a sense of orientation and momentum for your investment.
How to analyze the market feeling
For analysis of market feelings, follow these steps:
Step 1: Collect data
Collect data from reputable sources such as:
- Websites for financial news (eg Coindesk, Bloomberg)
- Social media platforms
- Internet forums (eg Reddit’s R/Cryptocurrency)
- Applications and websites trade
Focus on specific crypto currency or market segments, such as Bitcoin, Ethereum or Altcoins.
Step 2: Identify key feelings indicators
Analyze data to identify key feelings indicators including:
* Price Movements : Look for trends, patterns and volatility in prices movement.
* Trading Volume : Analyze the amount of trading, especially during market hours when prices are probably unstable.
* News and events : Supervise news titles, public announcements and announcements that can affect markets.
Step 3: Categorize the sentiment
Classify feelings in one of the following categories:
* Positive : a bull’s mood, indicating investors expecting prices to increase.
* Negative : Bears are feelings, indicating that investors expect a price reduction.
* neutral : mixed feelings, where prices are stable or fluctuating.
Step 4: analyze the trends of feelings
Over time, analyze trend patterns and changes in feelings. Look for:
* Trend reverse : Identify a reversal period when prices change direction.
* changes in volatility : oversee the fluctuation in the amount of trading to evaluate trust in the market.
* Cyclic trends : Consider seasonal or cyclical factors that can affect the mood of the market.
Step 5: Evaluate feelings indicators
Assess the reliability and accuracy of each feeling indicator. Consider:
* Frequency and consistency : How often do these indicators appear and how consistent are their changes?
* Upper mistakes : Can you believe the feeling or intuition on a particular trend?
* Risk over the reward : Investing is based on feelings or is it purely conducted on the market?