*Article* **The Cryptocurrency Market in Transition before and after COVID-19: An Opportunity for Investors?**

**An Pham Ngoc Nguyen 1,2,\*, Tai Tan Mai 1,3, Marija Bezbradica 1,3 and Martin Crane 1,3**


**\*** Correspondence: ngocan.nguyenpham6@mail.dcu.ie

**Abstract:** We analyze the correlation between different assets in the cryptocurrency market throughout different phases, specifically bearish and bullish periods. Taking advantage of a fine-grained dataset comprising 34 historical cryptocurrency price time series collected tick-by-tick on the *HitBTC* exchange, we observe the changes in interactions among these cryptocurrencies from two aspects: time and level of granularity. Moreover, the investment decisions of investors during turbulent times caused by the COVID-19 pandemic are assessed by looking at the cryptocurrency community structure using various community detection algorithms. We found that finer-grain time series describes clearer the correlations between cryptocurrencies. Notably, a noise and trend removal scheme is applied to the original correlations thanks to the theory of random matrices and the concept of Market Component, which has never been considered in existing studies in quantitative finance. To this end, we recognized that investment decisions of cryptocurrency traders vary between bearish and bullish markets. The results of our work can help scholars, especially investors, better understand the operation of the cryptocurrency market, thereby building up an appropriate investment strategy suitable to the prevailing certain economic situation.

**Keywords:** cryptocurrencies; noise and trend effects; tick-by-tick data; network structure; community detection; COVID-19
