Cryptocurrency Trading Fundamentals
Course overview
4. Crypto market cycles
Given the inherent volatility and the need for risk management in the emerging cryptocurrency market, understanding market cycles offers crypto traders a significant advantage, as aligning trading strategies with prevailing trends often leads to greater long-term success, though accurately identifying these trends can be challenging.
The Bitcoin cycle is closely tied to its halving events. Roughly every four years, these events trigger a reduction in the block reward for miners. For instance, the April 2024 halving lowered the reward to 3.125 BTC, a considerable decrease from the 50 BTC initially awarded in 2009.
Altcoin season is a period in the cryptocurrency market when altcoins experience substantial price increases compared to Bitcoin. Traders shift their holdings in anticipation of higher returns. Altcoin seasons are known for historical volatility, unpredictable outcomes, and potential bubbles and subsequent crashes driven by market hype and speculation.
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