Considering the recent trend in the cryptocurrency market, a crypto expert claims that the market is projected to experience frustrating and erratic price movements in the short term as volatility and uncertainty continue to plague the sector.
This projection suggests that the market may become more unpredictable and unstable without significant triggers, hindering both short-term and long-term investors.
Crypto Market Faces Uncertainty And Frustrating Volatility
In a pessimistic prediction, market expert and enthusiast crypto Dan has forecasted that the cryptocurrency market will likely stay volatile, frustrating investors and traders in the coming weeks. The expert warns that the sector may see an extended period of volatility, probably due to macroeconomic issues and changing investor sentiment.
According to the expert, the crypto market has drastically calmed down due to the long-term sideways movement and changes. However, it has displayed poor movements since March, failing to break through toward the upward direction on 5 distinct occasions.
After observing the trend of the moving average of the short-term and long-term Spent Output Profit Ratio (SOPR), Crypto Dan has identified a dead cross pattern, indicating a continued weakening market trend.
Even though the market is currently demonstrating a waning momentum, the expert noted that a short-term rebound owning to optimistic market sentiment could be expected due to the anticipated United States rate cut scheduled for September 18. However, frustrating price swings will likely persist within the year if the crypto market fails to reverse significantly.
While it is unfortunate that frustration is projected to continue, the analyst claims it is imperative as investors wait for 2025 with great effort and patience, which is believed to be a bullish year for digital assets.
Liquidity In The Market Is Growing
The crypto market might be trending negatively, but another crypto analyst Caueconomy, has cited a substantial increase in liquidity in the sector, reflecting a stronger market participation and demand for digital assets. Caueconomy highlighted that through the popular dollar-pegged stablecoin USDT, more than $3 billion was added to the market in the last 30 days.
According to the expert, this kind of increase in capitalization indicates a larger deployment of external capital within the market, which is necessary to collateralize products and goods from the traditional market to issue additional USDT. He further noted that when stablecoins liquidity is higher, it implies a greater demand for digital assets, but this may not always happen immediately.
Rather during this time, most of the capital dedicated to stablecoins is not yet putting buying pressure on the market. Nonetheless, this strong development might potentially hit the market at any time. “In addition, institutional investors may be buying digital assets via TWAP orders or with algorithms to reduce the impact on the short-term price,” he added.