After reaching the point of extreme greed, the crypto market suddenly turned into fear. But investors shouldn’t panic – according to stock market analysts, the recent collapse involved making normal profits and rebalancing the portfolio.
Could this be the case with crypto, and will the market recover soon after a normal and healthy correction?
Is it Healthy or a Decline Herald?
This week, there was a huge sale across the board in all markets. Among those most affected were overvalued technology stocks and cryptocurrencies. Dow Jones and the S&P 500 also fell, but not so drastically.
Market sentiment quickly turned into fear from excessive greed, and with Black Thursday still fresh in investors’ minds, they wonder how bad things could get.
Thoughts on the matter were mixed, a team of analysts gathered on CNBC to share their views. Analysts included Jason Snipe of Odyssey Capital Advisors, who had a more rational theory:
“I’m looking at this historically great summer, especially last month, which was the best August of the last 10 years. I think there is some rebalancing, I think it is a little profit. I know that September has historically been a slow month. ”
Crypto Market May Improve, But Choice Risk Remains
If the current collapse is just profit and portfolio rebalancing, as Snipe suggests, any adjustments made are normal and healthy.
Almost all crypto assets rose during the year thanks to a rising tide that lifted all boats, and the stock market climbed to all-time highs. Investors who bought it at any point in the previous year could be profitable and securing some of it.
Others may be making a profit from one investment and investing in another, or even turning their investments into cash and waiting due to the upcoming movements due to the election. The elections this November remain the biggest risk in the market, even greater than the global pandemic the modern world has ever seen.
While it is said that a Biden win could seriously hurt the markets, Trump could cause the value to pump. With the pandemic making voting more difficult at the moment, the situation can be used to spoil the election, leaving a cloud of uncertainty and therefore risk in the market.