Since the launch of Bitcoin about a decade ago, the crypto market has sprung up a variety of new currency tokens such as Ethereum, Litecoin, Ripple, Tether, and so forth. Investors and traders compete to make maximum profits in this market. According to CNC Market, crypto market trading is very volatile and difficult to predict, both for buying and selling Bitcoin and other cryptocurrencies.
There is a huge profit opportunity due to the high volatility, but there are also many people who give up due to excessive losses and choose to stop trading crypto.
Actually, you can still predict the movement of the crypto market and reap the benefits as in trading other assets such as forex and gold. You must understand some factors affecting the cryptocurrency market, not just rely on technical predictions or intuition.
Let’s See 6 Factors Affecting Cryptocurrency Market Movements:
Power of Demand Supply
In any market, there are always supply and demand fluctuations that affect asset prices. Likewise in the crypto market. Bitcoin, Ethereum, Ripple, etc are assets whose value can change along with supply and demand fluctuations in the cryptocurrency market.
Use of Crypto Coins
Basically, the value of any asset is determined by its use. Ordinary currencies such as the dollar can have a certain value because they the government recognize it.
A similar situation is faced by blockchain-based cryptocurrencies. The use of crypto coins also influence the current price difference.
The exchange rate of any cryptocurrency will be based on its long-term use. Cryptocurrencies with the most functions and offer the most multipurpose blockchain innovation will survive in the market.
Price of Bitcoin
Until now, Bitcoin is still titled “The King of Crypto“. This is based on at least three things, namely its position as a pioneer, its diverse functions, and its use in the real world.
Bitcoin is not only traded digitally but also can be used in transactions for various products and services, from paying tuition fees to buying property.
A strong Bitcoin position. This makes it the center of the crypto market in general. If the price of bitcoin experiences a bullish trend, the crypto market will tend to increase. Conversely, if the price of bitcoin drops and experiences a bearish trend, the crypto market will also be depressed. Although this situation may not occur every day, you can see it clearly in the medium to long term.