Can we anticipate cryptocurrency movements?

[Mila]

 It’s now been over a decade since Bitcoin made history as the first digital currency, and so much has changed in such a short time. A whole industry has sprouted up, complete with exchanges, brokerages, trading platforms and even a dedicated news sphere. What started as a single coin has now evolved into a veritable marketplace with thousands of cryptocurrencies and digital tokens available to trade at any time of day or night. Despite peaking in January 2018, crypto is still currently gaining in popularity, with more and more new actors entering the market every day.

But for many ordinary folks, cryptocurrencies are a complete mystery. It’s unclear to them what determines their value, and predicting future price movements seems akin to a dark art. Therefore, what are the factors that impact the value of a given crypto coin and how can you anticipate where the price is headed?

Well, cryptocurrency prices are predominantly determined by how valuable consumers consider them. Nevertheless, there are also certain objective phenomena that definitely affect their worth. So, without further ado, let’s take a look at what factors impact crypto and what drives prices up or down.

Supply and demand

It might seem like Economics 101, but supply and demand really do play a massive role in the price of a given crypto coin. In fact, in the absence of currency boards and central banks, crypto prices are predominantly influenced by the asset’s availability versus demand for it. The harder it is to obtain, the higher the price will be and vice versa.

Let’s look at the example of Bitcoin and XRP (Ripple). BTC’s supply is capped at 21 million coins, with less than 4 million left to be mined. This is one of the reasons Bitcoin was able to rise so prolifically: demand went through the roof, while supply remained the same. XRP, on the other hand, has a cap at 100 billion. At the time of writing, almost 43 billion are in circulation, leaving a lot of coins left. That is one explanation as to why XRP’s value hasn’t gone over $3.

Mining

Another factor that influences cryptocurrency prices is how hard it is to mine the coin in question. The term mining is used to describe the act of validating transactions and adding them to the blockchain. Bitcoin, for example, is extremely difficult to mine at present, meaning it isn’t as profitable as it used to be. There are already several mining pools that are dedicated to mining the remaining bitcoin and the more miners there are, the more difficult it is to mine for yourself, thus pushing the price of BTC higher.

Luckily, changes in mining difficulty are largely predictable. As we have seen, mining will become harder as the number of remaining coins shrinks. It is, by its nature, a very gradual process and it is highly unlikely that a cryptocurrency will suddenly become significantly more difficult to mine overnight.

Politics and regulation

Cryptocurrency regulation varies greatly from country to country. Some governments are so welcoming of crypto that it has even been deemed legal tender. Others, however, have gone as far as to ban it outright. As more countries begin to look at how to regulate cryptocurrencies, the number of transactions could be affected. If a government takes an overly restrictive stance, it could negatively impact the price of a coin. Conversely, with better regulation, more people might be encouraged to adopt crypto.

Another interesting dynamic we’re seeing nowadays is cryptocurrency emerging as a new type of haven asset. Many ordinary people from countries in crisis, such as Venezuela, are turning to Bitcoin as a way of protecting their savings from the ravages of hyperinflation. Thus, political and economic instability could soon become predictors of cryptocurrency price rises.

Utility

All the most popular cryptocurrencies have some sort of practical application. If a coin serves no purpose, it will generally tend to have a lower price. Bitcoin’s purpose is to be a peer-to-peer cashless system that could make digital money a reality for the masses. Ethereum allows people to create their own decentralised apps and conclude, execute and manage smart contracts. Meanwhile, Zcash is one of the only coins that allows users to retain total anonymity when making transactions. If a cryptocurrency has no practical use, this will probably be reflected in its price on the market.

When looking at altcoins as an investment, it’s crucial that you narrow your search down to those with real utility. Then, if there is a call for a function which your chosen coin can perform, you can be fairly sure the price will eventually rise. A good example is IOTA. Once the Internet of Things (IoT) becomes a reality, demand for this coin is almost certain to rise – and with it, its price. While it won’t help you predict short-term gains, it’s certainly a great barometer of long-term growth potential.

News and media

Both positive and negative news can greatly influence a coin’s price. For example, if the media starts reporting about a recent hack that occurred, it’s most likely going to drive prices down. On the other hand, covering the rising adoption of a coin can result in prices going up.

The only problem with using news to pre-empt trends is that you have to act fast. By the time you hear the information, the market will usually have already priced any impact in. It’s much better to combine trading with the news of more general sentimental analysis and solid technical analysis of the current market situation.

The long and the short of it?

As we have observed, cryptocurrency popularity (and value) is affected by numerous factors and it can be extremely tricky to anticipate where the market is headed with any degree of accuracy. There’s a reason crypto has such a reputation for volatility. To avoid missing out on your chance to profit, you need to be poised to strike when the time is right. A good place to start is by opening and funding a trading account on a reliable platform like StormGain. That way, you’ll be primed and ready to go the moment you see a trend emerging. Good luck and happy trading!

https://stormgain.com/news/can-we-anticipate-cryptocurrency-movements

[sampoerna]

Crypto is influenced by the community, media, and of course the token holder or investor. In my opinion we cannot. Because it is too complicated and large to handle this.

[Senin]

Cryptocurrency continues to really develop very quickly and say in which direction it will be
to develop is almost impossible.
Coins, which are universal means of payment, must go along the path of speed and low cost of transactions while increasing their functionality. Tokens must be useful, serve a specific structure, type or area of ​​business or the scope of human activity. A decentralized cryptocurrency will also enter into various forms of interaction with stable coins of states and their usual currencies. Nobody knows what this will lead to.

[Istiak]

I think the market react in any situation. Mostly news make a very big impact. When good news come market goes up and when it is bad market goes down. Also, those people who holds big volume can also be a market influencer. If you can predict what they are thinking and they are up to then you can predict the market movements.

[Fenix]

I think that this year there will be a lot of good news for cryptocurrency. Now the price movement on the cryptocurrency market seems to have stopped, After a sharp drop in the price of bitcoin on March 12 to five thousand dollars, now the market has stabilized and froze while waiting for further events. So far, price movements will largely depend on how effective the further fight against the spread of coronavirus is. At the same time, many positive events are brewing in the world of cryptocurrencies. Even if a global economic crisis sets in, it should also have a catalytic role in the cryptocurrency market.

[masterrex]

Can we anticipate cryptocurrency movements? the answer is YES? You know why its because cryptocurrency movements have connected to all of the present and future events, the market was simply react to any news involving cryptocurrency, in that case, price movements were influence by those factors. like when the COVID-19 Pandemic was starting to spread and gaining attention from the community which later involves the cryptocurrency market right after the news has published the Bitcoin and other cryptocurrency prices was starting to fall.

[Seerge]

Cryptocurrency market movements are very fast, this is difficult to anticipate.  But we can take safe steps by saving dollars, and only occasionally buy or invest when prices fall.  But this is difficult, not as easy as I say.

[purpleseven]

Anticipating crypto movements can be done if many are trading. You can see a chart of crypto prices and start predicting and anticipating whether they will rise or decrease

[Prime]

Cryptocurrency market movements are very fast, this is difficult to anticipate.

Yes, crypto market can change the trends quickly. It is sometimes hard to predict because most of crypto prices can move suddenly to increase high or decrease very severe. I think we can prepare everything but to anticipate very well is a bit difficult to do.

[tonymillions84]

As more actors are discovering bitcoin and crypto currencies, the old actors are leaving behind because it has little or nothing to offer. scammers are gradually controlling the startup process by supporting projects for the short term. they always pull out of business whenever they have made huge money.

[DogeTalk]

By understanding to analyze and know when to buy and sell, you can do that. Anticipating crypto movements is quite easy if the trader has good experience

[MUGNIA]

crypto trading is very fast so it is difficult to anticipate, but if we can predict when to buy and when to sell it can minimize losses in trading

[tervel]

Cryptocurrencies are very news driven, if you are actively monitoring news in relation to cryptocurrencies you are likely to be one from many of the first to buy after good news, and sell after bad.

[Master107]

     what are the factors that impact the value of a given crypto coin and how can you anticipate where the price is headed?   

The factor is meaning and demand.
To anticipate the price you cannot.
You are in volatile place where the value is swinging, halving, and somehow become deep down to the bottom. We should not expect the price always in high value.

[hushpupppy]

Anticipate is more or less an assumption, and that is not good enough for the crypto currency sphere.
We need to always have all facts stated, and also ensure that we understand the emotions on the market.
Anything other than that will resort in losses.