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Analytics and prospects for the cryptocurrency market, Binance Research report The analytical division of the Binance exchange has prepared a report on the cycles in the market of cryptocurrency assets, the findings of which support the version that the minimum point of the current stage is already behind – the “bottom” is passed! According to the report Binance Research, when the price correlation Bitcoins and altkoinov the US dollar reaches a certain positive value, the trend Bitcoins tends to unfold or at least stop the movement in a previously set direction. Of course, investors felt the connection between the main virtual currency and all the others. A new study brought a scientific basis: at a certain time, the correlation value exceeded 0.94, which indicates an almost perfect correlation between the trend of Bitcoin and other cryptocurrencies . At the same time, the data show that the correlation value never fell below 0.8, so you can count on a single trend in the cryptocurrency sector. The periods of increased correlation in the crypto market are directly related to its focus on retail investors, analysts say. According to cryptofundresearch.com, 700 funds operating in the cryptocurrency market, as of January 2019, controlled less than $ 10 billion in assets. If we assume that all these assets were placed exclusively in Bitcoin, it turns out that such funds account for up to 14% of the capitalization of cryptocurrency. If we assume that the funds invest in Altcoins in accordance with their proportion in the market (about 50%), it turns out that such funds account for less than 7% of Bitcoin's capitalization. This value is only the thirteenth part of institutional participation in the US stock market and is as close as possible to the Chinese market, where in 2017 retail investors accounted for 99.8% of accounts, more than 40% of capitalization and more than 80% of trading volume. Another similarity between the cryptocurrency market and the Chinese stock market lies in the high turnover of funds that is characteristic of less professional markets.

“Crypto investors are probably more inclined to respond to news and information and hold their positions for a shorter time ,” writes Binance Research. “As a rule, non-professional investors tend to become overly confident or overly pessimistic, reacting to trends in the market, which leads to an increase in the volume of transactions and volatility.”

Another characteristic feature of the cryptocurrency market is “hodling”, when retail investors hold an asset at the stage of decline, but quickly become more active when the course starts to go up. Thus, the crypto-market is distinguished by the irrationality of participants who assess the situation overly positively and negatively, which in turn leads to the formation of bubbles or an unreasonably deep drop and is reflected in the correlation graph of digital asset rates. According to Binance Research, this was the case in 2018, when market sentiment reached a maximum point, so it can be now, with the difference that the reversal in the current case goes up. Publication date 14/04/2019 Share this material on social networks and leave your opinion in the comments below.