Is Crypto Sentiment Improving?


[01-12-2022 07:37 PM]

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How have Dogecoin and Bitcoin prices performed since August? Read before you start now with iFOREX crypto trading.

Crypto News: Latest Updates

Whether you focus on the “King of Crypto” Bitcoin prices or have your eyes on an altcoin like Dogecoin, it’s certainly been a bearish year for crypto trading—a trend which may be reversing. On October 26th, Bitcoin prices added 4.1%, taking gains for the previous three days to 7.8%, and reaching beyond a psychological barrier to $21,018. Some analysts, like Steven McClurg of Valkyrie Investments, felt emboldened to suggest we may be “building towards a modest rally as we head into November”. Ether also had a good day, seeing gains of 6.4%. Dogecoin, for its part, appreciated by a massive 13%, but this seemed connected with the imminent takeover of social media platform Twitter by DOGE supporter Elon Musk. Crypto author Noelle Acheson felt, similarly to McClurg, that this upward movement could signal “a building crypto sentiment shift”.

The next day, though, saw an end to the little rally, with Bitcoin losing 1.5%. Dogecoin continued on its own unique track, accumulating eyebrow-raising 30% gains in only four days, with Musk’s takeover planned for that coming Friday. Looking into the data, analysts saw that the average daily trading volume of digital assets among institutions in October was at a low ebb last touched in June 2020. CryptoCompare said the figures suggest “a bleak picture for crypto-based institutional products, as the macroeconomic climate still possesses much uncertainty”.

Indeed, this was not the first time in recent days Bitcoin prices had seen a short rally which, although sparking enthusiasm, soon petered out in the high-fear, high-interest-rate environment that has been discouraging risk appetite for months. Join us as we explain in more detail for readers who are experienced in CFD crypto trading, but also for those who are just about ready to start now with iFOREX crypto trading in the form of CFDs.

 

August

Mid-August was only one month before the anticipated Merge within the Ethereum blockchain, which was drumming up traders’ crypto enthusiasm. Bitcoin was hovering in the area of $25,000, with Ether close to $2,000, but Dogecoin gained 14% in only five days, and Shiba Inu climbed a breath-taking 40% in that time. “Dogecoin and Shiba Inu have both broken out over the weekend, clear evidence that the retail investor is back”, announced Hayden Hughes of Alpha Impact. He also said the dog-themed coins could be in for more good news because they were scheduling upgrades of their own. Risk appetites had been awakened due to some data which showed that US inflation had improved, but not everyone was confident to the point that could’ve caused a market shift. When it comes to the smaller meme coins, even a small jump in demand can cause them to “hit a liquidity pocket and fly up, drawing in more speculators”, explained Cici Lu of Venn Link Partners.

 

September

June had seen Bitcoin prices stoop down all the way down to $17,600 after some well-known crypto lenders and hedge funds disappeared. The first week of September was actually not all that far off, with prices falling to $18,750 on the seventh of the month, when Ether lost another 4.4%. The high costs of borrowing were exerting relentless pressure on risk assets, which had come to include cryptos. “The macro narrative is very hard to be able to let go and will drive risk assets”, suggested Kevin Loo of IDEG Asset Management. By that point, the value of the crypto sector had dropped below $1 trillion.

Checking in with Polkadot: the coin was trading at $6.42 on September 22nd, way down from its $54 value in November last year. The DOT token took a beating with the rest of the sector at the start of the year, dropping to single-digit values by May. The special power of this blockchain allows it to produce custom-made “parachains” for developers.

 

October

The first days of October saw another surge in risk appetite after traders entertained the idea of the Fed loosening monetary policy. Cryptos benefited from the trend but, after only two days in the green, the party was over, with Bitcoin down 1% and coins like Cardano, Solana, and Ether also in the red. “Cryptos still trade tit-for-tat with traditional markets”, commented Walter Teng of Fundstrat at the time. The pattern of the shooting-star rally, as we’ve seen, was to repeat itself later in the same month. Dogecoin surged 9% on October 5th, while traders felt encouraged by the news that Elon Musk would indeed purchase Twitter after a period of doubt on the point.

Catching up with Litecoin: prices were at $51.18 per coin on October 21st. Back in 2011, a Litecoin was worth only $3, but the prelude to the October 2022 value was a giant 74% loss for the year so far. One thing Litecoin has in its favour is its widespread acceptance as a payment method, however the next few months of Litecoin performance may be particularly interesting as it goes head to head with post-Merge Ethereum.

 

Looking Forward

Kevin Loo says that, “if you measure trough to trough, the trend is we are heading higher in the longer term”, referring to recent fluctuations in Bitcoin prices. CFD crypto traders will need to consult a range of market analysis before reaching their own convictions on the matter. Start now with iFOREX crypto trading as CFDs and take advantage of the broker’s wide range of educational resources, from guides explaining how to take advantage of Bitcoin prices to video tutorials, 1-on-1 training with a live trading coach, and a risk-free demo account.   




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