Rui Dias – Polytechnic Institute of Setúbal, (ESCE/IPS), 2910-761 Setúbal, Portugal; Center of Advanced Studies in Management and Economics, University of Évora, 7004-516 Évora, Portugal
Mariana Chambino – Polytechnic Institute of Setúbal, (ESCE/IPS), 2910-761 Setúbal, Portugal
Cristina Morais da Palma – Polytechnic Institute of Setúbal, (ESCE/IPS), 2910-761 Setúbal, Portugal
Keywords: Cryptocurrency;
Overreaction;
Mean reversion
Abstract: The present research focuses on the phenomenon of cryptocurrency market overreactions, especially examining the behavior of Bitcoin, DASH, EOS, Ethereum, Lisk, Litecoin, Monero, NEO, Quantum, Ripple, Stellar, and Zcash from January 2, 2018, to March 1, 2023. The findings show that there are both positive and negative autocorrelations, which might result in lowered volatility and more moderate fluctuations in prices. These results possess the potential to assist investors in making well-informed choices since they are less susceptible to being influenced by exaggerated reactions to news or information hitting the market. However, before investing in cryptocurrency markets, investors should exercise caution and carefully examine their risk tolerance, since market circumstances may change quickly, making it impossible to perform consistently profitable trades.
9th International Scientific ERAZ Conference – ERAZ 2023 – Conference Proceedings: KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, hybrid – online, virtually and in person, Prague, Czech Republic, June 1, 2023
ERAZ Conference Proceedings published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia
ERAZ conference partners: Faculty of Logistics, University of Maribor, Maribor (Slovenia); University of National and World Economy – UNWE, Sofia (Bulgaria); Center for Political Research and Documentation (KEPET), Research Laboratory of the Department of Political Science of University of Crete (Greece); Institute of Public Finance – Zagreb (Croatia); Faculty of Tourism and Hospitality Ohrid, University of St. Kliment Ohridski from Bitola (North Macedonia)
ERAZ Conference 2023 Conference Proceedings: ISBN 978-86-80194-72-1, ISSN 2683-5568, DOI: https://doi.org/10.31410/ERAZ.2023
Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission.
Suggested citation
Dias, R., Chambino, M., & Morais da Palma, C. (2023). Cryptocurrency Market: Overreaction to News and Herd Instincts. In V. Bevanda (Ed.), ERAZ Conference – Knowlegde Based Sustainable Development: Vol 9. Conference Proceedings (pp. 67-75). Association of Economists and Managers of the Balkans. https://doi.org/10.31410/ERAZ.2023.67
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