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MARKET SENTIMENT AND ITS IMPACT ON THE BEHAVIOR OF CRYPTOCURRENCIES

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madridbg
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2 years agoSteemit4 min read

Author: @madridbg, through Power Point 2010, using public domain images. Oleksandr Pidvalnyi


Greetings and welcome dear users of this prestigious platform, especially to all those who make life daily in the @Projecthope community, the topic that concerns us this time, is related to the constant variations in the cryptocurrency market product of the sentiment that investors manage in the short medium or long term.

In this sense, it is no secret that knowing the market sentiment has become an investment strategy, which seeks to objectively use the beliefs or opinions of users to anticipate future movements within a stock market.

So that through this approach, variables associated with the personality of each user are handled, where emphasis is placed on the emotions, beliefs and attitudes of traders about a given asset specifically about the cryptocurrency market.


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Undoubtedly sometimes the sentiment does not correspond to the reality of the asset, but this can manage to generate a certain effect on the behavior of the price of the asset, which implies that the market sentiment is directly related to the fundamental analysis that one has on investments.

Thus, by focusing our observation on identifying the characteristics of a population sample, we can determine the generalized opinions of users, allowing us to understand the level of anxiety about an asset and, based on the results, we can make precise decisions about the right time to enter or exit the market.

In this sense, we must understand that at the level of macroeconomic study, the sentiment about an asset is handled with the fact of giving our point of view, product of the analysis and studies that have been conducted on it, therefore, when a conglomerate of opinions converge regenerates a specific behavior on the asset, an effect that is called market sentiment, which we will be associating with the crypto world and blockchain in general.


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To understand this influence more directly, we can use the media manipulation that at one point Elon Musk used on an asset that had no utility, but thanks to the influence and opinions of this character, he managed to develop a sentiment that ended up producing historical bullish breaks within the crypto asset in question and generated good dividends in the portfolios of investors.

Therefore, unlike structural or technological technical analysis processes where a systematic analysis method is used to understand individual points of view regarding the behavior of an asset, the attitudes and influence of an asset do not always correspond to data that can be easily quantified; on the contrary, they cannot be determined through a collective emotional state of the community.

Therefore, analyzing market sentiment is not an easy task and is often lost in terms of subjectivity, as we focus our attention on analyzing user behavior in different social networks.

What we must be sure of is that a proper study of the behavior and sentiment of an asset allows us to generate substantial profits when this sentiment points in the same direction, whether bullish or bearish.


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The design of the portal was made by @madridbg, using public domain images

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Grateful with the community @project.hope and with all the management team of the same one that they motivate us to continue working in a mutual and balanced growth.

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