The recent crypto market collapse was only “profit-taking” and “rebalancing” so the traders should not worry, according to stock market analysts as we are reading further in our crypto news today.
After reaching the point of extreme greed, the crypto market turned to fear but investors should not panic as the stock market analysts believe that the recent crypto market collapse has only seen the market “rebalancing.”
Across the markets this week, there was a huge selloff across the board. Among those that were hit the hardest, were overvalued tech stocks and cryptocurrencies. The Dow Jones and the S&P 500 also dropped but not as harsh. The market sentiment went from extreme greed to fear with the Black Thursday still fresh in the investors’ minds. Thoughts were mixed on the matter but a team of analysts got together on CNBC and shared their views. Among them was Jason Snipe from Odyssey Capital Advisors that had a rational theory:
“I look at this summer, which is historically great, particularly last month which was the best August in decades. I think it’s a little bit of rebalancing, I think it’s a little bit of profit-taking. I know September is historically a slow month, there won’t be a lot of news coming and also preparing for the election.”
If the recent crash was just rebalancing as Snipe suggested, then any correction along the way could be healthy and normal. Almost all of the crypto assets increased thanks to the rising tide that lifted all of them and the stock markets soaring to new all-time highs. The investors that purchased during any point of the year are in profit and could be securing some of that. Others could be taking profit from one investment to another or can just cash out and sit out the upcoming storm related to the election.
The upcoming election this November remains the biggest risk that is poised to the market which could be even larger than the global pandemic unlike the modern world has seen. If Biden wins it could hurt the market while Trump could cause things to pump further. However, the drama behind it could erupt and could influence the poll counts. With the pandemic currently making the election process challenging, the situation could be used to disrupt the elections as well as the markets.
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