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This Crypto Market Pattern Is Tricking You (and How to Avoid It)

source-logo  coinedition.com 18 June 2024 14:36, UTC

The crypto analyst hosting the House of Crypto YouTube channel has identified a crypto market pattern that may mislead retail traders who don’t understand it. In a recently uploaded video, the analyst segmented the cycle into different phases, including depression, hope, and shakeout before the explosive bull market.

The House of Crypto host described each phase, explaining its potential impact on a retail trader’s investment habits. According to the analyst, the depression phase occurs immediately after a bear market, leading many traders to believe the crypto market may be over. A rally that injects hope among retail crypto traders follows immediately after the depression phase.

As part of their analysis, the host showed how pullbacks follow the rally to cause a “shakeout” in the crypto market. They noted it as a phase where retail traders could lose faith in the market before the beginning of an explosive rally.

Meanwhile, the crypto channel host highlighted the current dip in the crypto market as a typical shakeout, potentially setting the market up for a parabolic bull run. According to the analyst, the smartest thing for a trader to do is to find the altcoins with the most potential to rally during the bull run, based on how much of a shakeout they experienced during the pullback.

The host explained that smart traders focus on coins that most people are scared and depressed about, noting them as digital assets at their lowest levels with the highest profit potential. They highlighted that experienced traders caught in the “shakeout” phase are adopting the Dollar Cost Average (DCA) trading model to restock their portfolios in anticipation of the bull run.

As a suggestive analysis model, the host used the 90-day percentage on CoinMarketCap to advise against buying the best-performing coins, noting they have already been pumped. He recommended that traders look for the coins that are down the most. According to him, those are the coins with the best opportunities when the market resumes its rally.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.