Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.
The former lead of the Ark Invest crypto branch has an opinion on what is happening with the cryptocurrency market and why it craves the volatility it got used to through years of trading operations.
The rangebound on the cryptocurrency market is the last thing investors would like to see, considering the lack of volatility of trading volume following it. Burniske said it is “no wonder” that cryptocurrency traders are starting to “go crazy” after living more than a month without any volatility spikes.
No wonder people are starting to go crazy, this space lives on volatility and when it’s not in the market, it surfaces from within 🥴 https://t.co/oAvHqQZCdJ
The demand for risk is not the only problem on the market. Volatility has always been one of the main drivers for the cryptocurrency industry, as retail traders provide more inflows to the market whenever they see a high return probability.
With high retail inflows to the market, institutional investors usually give more attention to digital assets, hence providing funding that launches long-term bullruns and increases the profitability of the industry as a whole.
Despite the necessity of volatility in the market, it may sometimes be a good thing for a certain layer of investor. Whenever the market is ranging, it is easier to accumulate assets by purchasing them at the lower border of the rangebound each time the asset reverses.
Some traders use scalping strategies by amplifying their profit with the help of leveraged trading. However, such a strategy is usually considered high risk and should not be executed without proper risk management and preparation. According to the CVI indicator, the average volatility on the crypto market decreased by almost 50% since June.
Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.
Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.
Disclaimer: Any financial and market information given on U.Today is written for informational purpose only. Conduct your own research by contacting financial experts before making any investment decisions.
