What is consolidation in crypto: Consolidation: Definition, Meaning, Example, and How It Works

What is consolidation in crypto

What is consolidation in crypto

In the effort to find places these monies could produce a return, a substantial amount of the funds went into the new “crypto” space. And, this includes building up a sensible and effective regulatory system, something that is coming to the crypto-world in the near future. Some players, like Sam Bankman-Fried, seem very cognizant of what is going on and are anxious to work with others to consolidate and build for the future.

Dr. Mason has served on the boards of venture capital funds and other private equity funds. He has worked with young entrepreneurs, especially within the urban environment, starting or running companies primarily connected with Information Technology. As the industry has grown, large crypto exchanges have repeatedly stepped in to bail out projects or companies that run into trouble. B2B “buy now, pay later” company Hokodo raised $40 million in a series B round led by Notion Capital. Korelya Capital, Mundi Ventures and Opera Tech Ventures also participated in the round.

What is consolidation in crypto

When a trading channel this narrows, it is typically resolved with explosive movement. This period is especially attractive for long-term users who are looking to buy and hold. For short-term traders, however, patience is key, as this phase can last anywhere from weeks to months or even years. At this point, positive news relating to the market circumstances at large can capture market participants’ attention and potentially push the market into the next phase — the markup phase. At a high level, market cycles are specific patterns that typically emerge from the psychology of market participants and the greater economic environment. This is a natural phenomenon that occurs in every market, and the crypto market is no exception.

When it stops moving sideways, it could break out in an upwards or downwards direction! Obviously this is not financial advice, since I won’t even commit to a direction. But if it breaks down, it’s gonna come fast and hard, like a hammer. Not saying the run up of this morning will be repeated, but a breakout will happen.

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. In both examples, it took the asset roughly four years to complete a market cycle; hence, the conclusion that an average crypto market cycle takes four years. However, be wary when making decisions based on this data, because it is based on a very small sample set and there may be black swan events that the industry hasn’t seen.

Crypto consolidation is here, and it’s messy

John M. Mason writes on current monetary and financial events. He is the founder and CEO of New Finance, LLC. Dr. Mason has been President and CEO of two publicly traded financial institutions and the executive vice president and CFO of a third. He has also served as a special assistant to the secretary of the Department of Housing and Urban Development in Washington, D. C.

Veloce Network is a valuable resource for anyone looking to stay informed and learn more about the business and technology industry. The blog provides readers with the information they need to make informed decisions and stay ahead of the curve in today’s fast-paced business landscape. When Tether, issuer of the USDT, further solidified its position as the largest stablecoin by also hitting a market capitalization of $50 billion, it received much less attention. Stablecoins, by all reasonable accounts, have more practical applications than Dogecoin for individual and institutional adoption. In February 2021, the meme coin Dogecoin surged over 50% immediately after Musk tweeted about it.

What is consolidation in crypto

So the big positive for Conflux is “access to China blockchain growth.” But the big negative is the potential geopolitical and regulatory risk involved. From my perspective, the potential upside is simply not worth the risk of having the value of your asset fall to zero if regulators decide to go after it. So it’s easy to see why there’s so much momentum and excitement around Conflux. You can invest in a Chinese blockchain leader at a time when nobody’s heard of it, and when it’s trading for less than $1.

Conflux, a China-based blockchain network, has powered its way to 1,800% gains in early 2023. It frequently occurs after downtrends or uptrends and can be seen as a stretch of indecision. From basic trading terms to trading jargon, you can find the explanation for a long list of trading terms here. Stablecoins have long been considered the safer option for bringing crypto to the world.

If Shiba Inu rejects from the 200-day SMA and trades lower afterward, the possible uptrend will be negated with a lower high. A breakout is when the price moves above a resistance level or moves below a support level. The price movement of a breakout can be described as a sudden, directional move in price that is… Decentraland price is on a 10-day uptrend as it moves diagonally along an ascending trendline.

Consolidation is worth doing, provided that you do not need to send BTC in the near future. Alternatively, you can consolidate only part of the inputs so that some of the funds remain intact. There is a special field to identify the payment, so no consolidation is required. Consolidation can be done in 1 transaction by sending coins from different inputs to one address. Тrading volume refers to the total number of shares (or tokens/coins) that have been exchanged between buye… Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

Why Something Like Interledger Could Lead to Cryptocurrency Consolidation

Each BTC transaction carries a cost, and doing several can add up to a hefty sum. “Bitcoin consolidation” in this sense refers to bundling up several transactions into one to save on network fees. “Consolidation” can have other meanings in various contexts in trading, investing, and markets. What’s most important in a consolidated crypto market is to rationally decide how to play the market given the existing conditions. I used to work at a hedge fund and the largest bank in Hawaii. Now I help traders optimize their trading psychology and trading strategies.


Due to the larger per candle range, I’m thinking it could be more extreme. San Francisco-based company Pave raised $100 million in series C funding in a round led by Index Ventures. The company, which helps customers benchmark compensation, also acquired the HR software and data provider Advanced-HR. Bitcoin and other crypto may be off of all time highs, just set earlier in 2021 in most cases, but that is not bad news for crypto adoption and development.

What Is a Sideways Trend?

As the crypto market shed $2 trillion in the last seven months, major crypto players like Coinbase, Crypto.com, BlockFi and Gemini announced layoffs. Although social metrics are hard to measure or predict, crypto assets have a tendency to fluctuate based on tweets or other forms of social media engagement from influential figures. The technological advancements behind a cryptocurrency can often become the catalyst for the start of a markup or markdown phase for the asset. The fear and greed index is a common indicator used by analysts to gauge this change in overall market sentiment.

Commonly referred to as the bull market phase, the markup phase is when the market moves higher in price at an increasing rate. During the markup phase, new groups of market participants enter the market, and with that generally comes a notable increase in volume at the beginning of this phase. The period of consolidation may last for days, weeks, or many months, and it’s impossible to say when it will end or where the market will go next – upward or downward. In an alternative series of events, suppose regulators did not approve the market release of YBY’s solution, with investors losing confidence in the company.

Sometimes a consolidation period emerges after a healthy price movement. Traders, careful about possible overbought or oversold positions, may look to smooth out movements before another trend emerges. US bank runs sent shockwaves through market participants, traders turned to Bitcoin and the “safe haven” narrative made a comeback.

Additionally, dips or pullbacks in the markup phase are mostly considered by many as an opportunity to buy, rather than a caution signal. The late spring of 2021 was a turning point for crypto when Bitcoin experienced a massive plunge to almost half of its highest price point. In November, a bounce-back came when BTC prices reached historical highs, only to drop back to very low lows, and the market hasn’t been the same ever since. This only adds to the uncertainty of how long a crypto trend or consolidation may last. Ideally, when you are trading stocks, you want to see enough price movement to profit from it. Depending on your strategy, whether the stock price is moving up or down might not matter much because you can trade both movements.

As already noted several times, past behavior is no guarantee for future performance. No one can be sure how the market will go after a consolidation. However, studying charts to spot trends and patterns is an excellent way to get a feel for how the markets work.

Therefore, no clear trend emerges, and assets typically trade within a tight range. It starts after the end of the previous cycle when sellers have exited the market and prices are perceived to begin stabilising. Crypto market cycles start with little to no interest in the market. However, as more interest and demand arise, asset prices generally rise to keep up with the increasing demand. At some point, prices reach a peak and eventually start to drop, as interest declines and supply outweighs the demand.

This is based on my current understanding, personal experience and research on the cryptocurrency markets. The descending triangle is a chart pattern used in technical analysis. The pattern usually forms at the end of a downtrend but can also occur as a consolidation in an uptrend.

But if you’re not looking for a bull market, then it might be time to sell your Bitcoins. There’s no need to worry, as the prices are capped by the exchange. The accumulation phase is also known as a consolidation phase, which generally marks the end of the downtrend. Some market participants may still consider it an uncertain time to enter the market, as it can be hard to deduce whether the asset will continue trending lower.

But from another perspective, longer-term holders often look at the accumulation phase as the precursor to what they hope will be the start of a bull market. If a crypto price is in a downtrend, it may find support at some level and start to move sideways in a consolidation phase. In this case, consolidation can be good, because it may indicate that the price has found a bottom and may move up soon. Alternatively, if the price is in an uptrend and then starts to consolidate, it may signify that the bullish trends are losing momentum, and the price may begin to move down soon. Consolidation in technical analysis refers to an asset oscillating between a well-defined pattern of trading levels.