Monday, October 25

Rally warning from the institution that estimated 146 thousand dollars for Bitcoin

Stating that Bitcoin can reach $ 146,000 in the long term, JP Morgan stated that the current rally is not sustainable unless the volatility in the crypto currency decreases.
JP Morgan said that the volatility of cryptocurrencies must decrease so that the Bitcoin rally does not end badly.

According to the note released by JP Morgan strategists, if the price fluctuations do not decrease, the biggest cryptocurrency cannot continue to be traded at current prices.

JP Morgan emphasized that the market value of Bitcoin has increased by $ 700 billion in the last 5 months, but only $ 11 billion of this comes from institutional investors.

Stating that limited supply and individual demand may still push prices up, strategists said, “The increases since January have been more affected by speculative flows.” said.

Galaxy Digital Crypto Money Founder Michael Novogratz predicted that Bitcoin will be $ 100,000 at the end of the year if more companies provide their customers with the opportunity to pay with Bitcoin.

“You will see that every company in America will do the same,” Novogratz told Bloomberg. he used the expressions.

MicroStrategy Founder Michael Saylor said that the Fed’s expansionary monetary policy played a role in investing in crypto money, but it seems difficult for risk-averse CFOs to add crypto to the company’s treasury due to the volatility in Bitcoin.

WHAT DOES “RALLY” MEAN IN THE MARKETS?

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The rally seen in the markets; It means that the price of a stock, bond, index, cryptocurrency or other financial asset is constantly increasing. A rally is seen during rapid or significant price movements in a relatively short period of time. This kind of price action can occur in both the bull and bear markets.

The term “rally” is often used when talking about upward volatility in the markets. The duration of a market rally is highly variable and depends on the time frame used when analyzing the markets. For day traders, a rally might be the first 30 minutes of the trading day when price fluctuations continue to reach new peaks, while a pension fund’s portfolio manager might see a different time frame as a rally.

The main reason for the rally to occur is a significant increase in demand resulting from the large amount of investment capital flows into the market. This situation causes the prices to rise. The length or size of a rally depends on the traders’ trades and the selling pressure they face. In a situation where there are many buyers but sellers are reluctant to sell, the possibility of a rally is high. If sellers are also relatively willing to sell, the rally will likely be shorter and price activity will progress in a narrower scope.

The rallies can be seen easily with the help of technical indicators. Various trend indicators are helpful in detecting rallies. Trend indicators evolve in the direction of the rising trend. The price action becomes upward and the price that reaches the resistance level experiences a break.

Why Does a Rally Happen?

There may be many reasons for the rallies seen in the market. The reasons vary, as rallies can be experienced on a long or short term basis. Short-term rallies can be experienced by factors such as supply / demand imbalance, sudden news flows, and various economic developments. For example, a short-term rally may occur in situations such as when a share introduces a new product or the company makes a surprise statement. Long-term rallies are seen after developments with long-term effects such as economic policies and interest rate adjustments. For example, there is a long-term rally in situations such as the release of positive economic data, positive and long-term changes in companies.

Can Rally Be Seen in the Bear Market?

There is also a rally in bear markets. Market prices have the potential to rise during a long-term downtrend. As prices fall, more and more traders assume that the next rally will mean the end of the downtrend and the downtrend ends. This rally shows a temporary upward signal in prices. The price increase generally varies between 10-20%. Usually the rally starts suddenly and takes a short time. However, sometimes rallies that are effective in the medium term can be seen. It is said to be a medium-term bear market rally, especially when there are multiple jumps and short-term rallies in the stock markets.

The rally seen in bear markets is generally interpreted positively. However, in such a situation, the situation may be risky for investors who buy stocks. When the rally is over, investors can lose their money if they don’t pay attention.

What Should Be Done When The Rally Is Seen?

Although the rallies usually point to a positive situation, investors need to manage risk and act strategically. Good gains can be gained from rallies with good planning and management. What needs to be done can be listed as follows:

Those who invest in mutual funds: Those investing in mutual funds should be careful, especially as equity mutual funds are significantly affected by the changes in the market. Focusing on diversity rather than investing only in mutual funds will protect against sudden losses from the rally.

Investment strategy: It is essential to create a strategy on which asset classes to invest. As the share prices of small and medium-sized companies increase, investments can become risky. Therefore, a good investment strategy should be implemented to secure portfolio income. Thus, the negative effects of the rallies in the market are largely eliminated.

Risk management: The desire to achieve high profits is common to all investors. But as with everything else, there is some risk in investment. Portfolio diversity, also referred to as “not putting eggs in one basket”, is a must for risk management. Portfolio management and diversity protect investors from risks.