The crypto market has been stuck in neutral, much to the chagrin of traders who expect nothing less than sudden sharp rallies or drops. Instead of making significant moves, prices continue to move sideways with Bitcoin and other top altcoins remaining within very narrow ranges. This is not by chance; it is as a result of “The Great Global Tension” which is a combination of political risk, macro overhangs and a risk off tone across all asset classes.
Doubt Keeps Market from Moving
At the heart of the sideways movement lies
indecision. Investors are not sure enough to be completely bullish and they are
not scared to the point of selling off everything. The ongoing geopolitical
tensions, unresolved wars, and politics of election years have left traders in
an environment where they require some form of assurance before taking huge
risks.
In the US, uncertainty related to the elections has
compounded the problem. It is difficult to determine the policy direction,
regulation as well as economic priorities and this is why the crypto markets
have turned out to be on a defensive side. When there is no belief, prices move
sideways.
The Great Global Tension Is Keeping Capital on the
Sidelines
There are numerous stress factors in global markets
such as geopolitical tensions, trade wars, and fragile diplomacy. Investors are
shying away from risks due to this widely known backdrop referred to as "The
Great Global Tension". Instead of massively adopting cryptocurrencies like
before, many people have chosen to keep their money in cash or maintain status
quo with other assets.
Crypto does well when there has been momentum build
up but such momentum requires confidence. Currently, there is little trust at
an international level.
Low Volume, Tight Ranges
Reduced trading volume is another reason for
concern. With few players involved, it becomes hard for markets to make any
movements. Bulls lack sufficient buying strength for pushing prices upwards
while bears do not have enough conviction to cause a breakdown.
This results in range-bound trading whereby prices
move up and down between support and resistance levels without showing any
clear direction. Although it might seem uneventful, history shows that such
times usually precede major events.
Economic Data Isn’t the Driver Right Now
Unlike previous periods, inflation figures and
interest rates have little impact on cryptocurrency at present. The market has
already factored in this information. What investors are actually anticipating
are political and geopolitical signs like truces, elections, policy statements
or regulatory guidelines.
Until these fall into place, crypto remains
stagnant.
What Happens Next
Sideways markets cannot remain forever; they will
always break out eventually due to uncertainty either way leading to volatility
afterwards. A resolution of major political tensions may unlock upside
potential while escalation could trigger another sell-off.
For now, crypto is on hold but not out of order yet. The market waits for a signal from the global community first.