What Determines Cryptocurrencies Price?
Of course, the first logical factor in the rate change is the ratio of supply and demand, as for any claimed asset on the exchange. The course grows in conditions of increasing demand, if people are willing to buy and buy, and decreases if demand falls.
In addition to pampers (“bulls” – users who buy instantly a large amount of currency), which we will discuss below, we can write down the popularity of currency, advertising, and a good media phone (positive news about Bitcoin) as factors for increasing demand. For example, a recent report on the recognition of cryptocurrency halal for Muslims instantly raised the course by $ 1,000. And the massive interest of the population and the fact that Bitcoin is “widely known” raises the BTC course slowly.
The size of the fanbase can improve the worth
The most interesting thing starts when the course of the cue ball rises or falls sharply. This is not at all indicative of the explosive interest of the population in cryptocurrency: this means that the bull has come to the exchange – the diaper.
A pamper (from the pump – to inflate: planned artificial inflation) is a player with a large amount of asset (in this case, bitcoins), who can instantly buy-sell orders, thereby raising the rate to maximum values extremely quickly. So pamper artificially creates a wave of universal excitement among inexperienced traders, buying orders at the right moments and creating the illusion of a steady growth of Bitcoin. Beginners are purchased, and pamper at the peak of activity creates a dump (deliberate collapse of the course) and drops assets, lowering the bitcoin rate to a minimum.
We can recall isolated cases: for example, when a certain Roger Ver sold in November 2017, according to rumors, he sold 250 thousand bitcoins, thereby derailing his price from $ 7880 to $ 5600.
Predict the rate of cryptocurrency
Economic news. In moments of scandal, the rate of cryptocurrency went down sharply because traders start to sell cryptocurrency. Then the other player, which went down in price, bought up the cue ball, as a result of which it becomes more expensive.
Analysis of pampers. After waiting for the period of smooth correction of cryptocurrency, the bulls begin a massive buying up of the asset and the exchange rate chart jumps up sharply.
Technical analysis. Price corridors, maximum and minimum levels, overbought and oversold zones. It is necessary to track the approach of value to the daily maximum and minimum, adjusting the actions in accordance with the general trend. There are even software tools to help determine the movement of the price curve in the near future: they are provided by brokerage companies, so you can buy them if you work solo for a certain monthly fee.
Analysis of ordinary news. Cryptocurrency is highly dependent on HYIP: mass interest and the associated word of mouth. Only someone’s unverified news of the form “Urgently in the room!” About how “Someone buys 10,000 bitcoins” can greatly change the course curve. Even the frequency of mentioning here is unimportant, since the media often reprints the “hot news” from each other, without having time to recheck them. You will be required to turn on your head and spend 10–20 minutes to independently analyze the “HYIP” news. To think, analyze and think again is a guarantee of a successful answer to the question “how to determine the course of Bitcoin”.
There are a lot of factors influencing the price of cryptocurrency, and most of them are under a big question. That is why cryptocurrency is so highly volatile as opposed to “traditional currencies,” which is why you can either instantly enrich yourself or go bankrupt.
If you still want to trade cryptocurrencies, then form your own clear idea of how the cryptocurrency rate is calculated, following the work of successful traders, and if there is such an opportunity, join their team – in general, do everything to minimize the risks. To come to this market “man from the street” and instantly get rich – the plot is fantastic, from the category win in the lottery or find a purse with money on the street.