The bearish trend of cryptocurrencies could be over. This is what a research published by Binance Research states. The well-known exchange platform has carried out an analysis of the sector by examining phenomena and trends detected within the cryptocurrency markets.
End of discounts?
The last analysis carried out by Binance Research highlights a completely new fact. For the first time, in fact, according to data collected from 2014 to 2019, in mid-March the longest correlation period in the history of the market was recorded between bitcoin and altcoin. According to this research, in the 90-day interval examined, the decline in bitcoin from $ 6,500 to around $ 3,100 could result in a rebound of the markets after the end of the correlation period. In other words, the research shows that the bearish period has already hit bottom and that now we are moving towards an upward trend. Mind you, though: the same creators of the research warn that the period considered is still too low to have certainties inherent in this correlation.
More investments in the public
Binance also revealed that, at present, less than 7% of all cryptocurrencies are held by institutional investors. This means that, at this moment, there is much more space for this typology than was initially thought. If this were to happen, there could be an upward trend in the value of cryptocurrencies. But why are there so many private individuals behind them? According to the report, the "frequent periods of extreme correlation of the cryptographic market are inseparable from participation strongly dictated by the market".
Turnaround in investments?
If Binance's theory were confirmed, we could also expect the end of the volatility of cryptocurrencies in the medium term. This remains, in fact, the real vulnus on which many detractors continue to point the finger. It must also be said that a distinction must be made between crypto traders and stock exchange operators. Generally, the former tend to overreact to changes, taking trading as a general trend without seeing the potential risks of a specific token in isolation. Precisely this pessimism entails, in the end, an excess of volatility of cryptocurrencies.
At this point one can do nothing but hope for a maturation of the market, that is, in a greater awareness that cryptocurrencies are not exclusively a speculative investment. From this point of view, the stability shown recently by Bitcoin can help.
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