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Not so long ago, cryptocurrency looked more like something from the matrix than a legitimate currency and financial market. Sure, people have made money on it, but how long can we really keep trading a money idea?
Over the past year, the cryptocurrency has gained some legitimacy as large investors begin to use crypto as a hedge against inflation issues. But after a few bad weeks, it’s hard to feel confident following their lead without more information and a real strategy.
When was the last time we saw a market as volatile as cryptocurrency? A single tweet from Elon Musk swirls the markets, prompting people to buy and sell their coins by the thousands. It’s a market that fell 30% and then gained 20% in a single week. Do you sell or do you own? Do you stay on the sidelines or do you jump? What’s the best way to assess such an unpredictable market?
In markets like this, I remembered Ralph Acampora, the godfather of technical analysis.
In 1995, Acampora stunned the industry, when he predicted that the Dow Jones Industrial Average would enter a bull market and rise from 4,500 to 7,000. When the prediction was true, colleagues and contemporaries at Acamporas were duly impressed, but he did not finish. He continued to analyze trends to accurately predict the Dow Jones to surpass 10,000, thus cementing his legacy.
So what does this have to do with cryptocurrency? We were currently at an inflection point where this investment is shifting from a novelty and a Wild West mindset to traditional investors seeking statistical analysis of market trends as a guide. While volatility seems to be in the DNA of cryptos, it’s hard to imagine having more data points to work with. Already in 2021, the crypto market has seen 39 days with a rise or fall of five percent or more. Bitcoin Bulls maintains that this volatility is positive. They say volatility is key to creating opportunities for significant value gains.
More moderate commentators point to the reality of global government regulation, saying investors are already scared. Large private investors also appear to be slowing down their purchases.
And then the detractors. It’s impossible to read about crypto without at least one analyst loudly proclaiming that the crypto market is a bubble about to burst.
With all of these conflicting views, it helps to think back to a brilliant time when a brilliant analyst took the available data and saw the future with clear eyes, focused only on the charts. Who is Ralph Acampora cryptos? Is anyone ready to lead us to the investment light?
As businesses and financial institutions begin to dip their toes into the world of crypto, it seems clearer than ever that this financial instrument is here to stay. In 30 years, we’ll look back and name someone the Acampora of crypto. Someone who has analyzed the market, read the tea leaves and seen the future. For those of us tempted to dive into the market now, hopefully we can recognize this person when they arrive.
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