Top 7 Factors Determining Bitcoin Price
Bitcoin, as it has been developed, never fizzles out to support a probable profit-making platform. Cryptocurrencies now follow the same steps, but Bitcoin upholds its reign as a king. Bitcoin is regarded as the most fickle cryptocurrency as the lord of the crypto ring. Each factor in cryptocurrencies price determination directly affects bitcoin’s market value.
However, for traders, the prior bitcoin price statistics is quite disturbing. The expected value of bitcoin could not be predicted by any future dimensions or analysis. Recently, a sudden devaluation of bitcoin has obscured the brains of crypto-traders. That abrupt price slippage of bitcoin attracts market risk for traders.
It is a prevalent incident that could occur to the trader of any Bitcoin. Before they sleep, they see the cost and when they wake up they see a hick of 10% or 50% or more or vice versa.
Let us face that. The volatility frequency of Bitcoin is simply greater than any other cryptocurrencies that exist. So the factors influencing the ups and downs of altcoins prices that densely impact bitcoin.
Overview of the Last Month’s Price Variance of Bitcoin:
I do not want you to lead the ancient time when the price of bitcoin was only 70cents. That part is well aware when in 2013 bitcoin started to raise its volume in traders market. That high publicity in crypto-trading made bitcoin a valuable digital asset for people. Let us have a look at the graph and see how green and blue lines are agitating in the past month.
Carefully look at the highlighted areas; one is the months highest another one is the lowest. Let’s concentrate on two mountain’s peaks that reached the USD value of $10,915.99 and $10,895.09 respectively where the lowest price of the month was $9,432.32. For the peaks the prices were running over the market cap, however, in case of the lowest price, the run was below the market cap.
It is also noticeable that soon after the peaks a sudden fall occurred two times but the rise was gradual after the first peak and then the lowest drop happened. Here in the second peak, no rise crossed the mark the only downfall is reflected. The current status of the bitcoin market only appraises the fear of traders.
The red circles in the graph show the highest prices and lowest price of the month and pink ellipses shows the massive drops soon after it reached the peaks.
What are the Reasons Underneath the Bitcoin Price’s Disturbing Graph?
So you may wonder how does the bitcoin’s price are so much volatile in crypto-market. How the price does undergo the process of rising and falling? Are traders influences market status?
There are so many queries which are blustering your mind right now. Let us clear your mind simply by elaborating the factors which are truly responsible for market fluctuation of bitcoin price.
Demand & Supply
The terms demand & supply is like blood running in the vein in the business world. From the beginning of your study until your long business career, you need to concern inextricably with the simple graph of demand and supply. So, how do these two facile terms hold the potentiality of determining the price of any commodity?
Higher demand and low supply create a high market value of any goods, henceforth the price will be low if supply increases. Let’s discover how a bitcoin’s low supply higher the demand as well as the price of it.
Bitcoin Mining and Price Deduction
The rare technique of bitcoin mining regulates the significant value of bitcoin. Scarce quality of bitcoin makes it more worthy for investments. As the supply provided in the market through the process of high-quality tech calculation the value rises whenever the reward is cut to the half. Analyze the highlighted region of the graph when the third deduction of reward rate occurred on July 9th, 2016. How the price of BTC raised during the session is reflected in the graph.
80% of the total volume which is subjected to mine is already circulating in the trading market. Remaining of is will continue to mine till 2140 by reducing the reward volume in every four years which is now 12.5BTC/mining after three deductions. The next year, 2020 the fourth halving will take place which is pre-programmed by the creator. This may be the possible reason for BTC is price fluctuation downward.
Political Impact
Even though bitcoin simply a digital asset, political issues all over the world implies the price of bitcoin. Suppose this year’s July statement of USA President Donald Trump may be one of the effective reasons for the falling price of bitcoin. He declares in tweeter that he is not a big fan of bitcoin. That fluctuated the bitcoin prince globally.
Another proof of political co-dominance on the regulation of bitcoin price was the segregation of Britain from the European Union in June and July of 2016 when also the third halving occurred. That period GBP faced a drastic fall on its rate while BTC was rising independently.
Social Media Influence
Marketing strategies of Crypto companies can influence the market value of that particular company. As bitcoin is the primitive coin its publication, news, new inventions everything is related to the market movement.
Social media catches most of the attention of the public. So any negative publication about bitcoin drops down the price however progression updates will also lead the price high.
For example, this year’s July tweet of Donald Trump gets huge positive and negative responses on social media. Some statement also influenced the regulation status of bitcoin. While some analysts did not find any severe effect on the tweet of Mr. Trump however market.
India conducted a social media announcement on September 16th, 2019 to catch the attention of lawmakers who are preparing regulation to ban crypto. The hashtag “Indiawantscrypto” became trading and tweeted over 56,600 times.
Regulation
The country needs regulation over the crypto-assets. There are many fraudulent that reported and also arrested during these 10 years. Although the security is tight in the network trespassing is possible and when it occurs it will steal millions of dollars from the network. Anonymous transactions are the possible reasons for these untraceable crimes. The government wants to protect the nation’s wealth. Countries are now more focused and aware of regulations. If laws are trying to bind the flare use of bitcoin then many traders may not accept the BTC as they are fond of it.
A current report from India where the crypto-assets were at the verge of demolishing from the country’s economy, some crypto-traders united to alter the bill. For the nation’s market, the bill needs to modified and come up with a solution but no problem for crypto-trader.
Adoption
Look at the growth chart of the BTC price. The popular bitcoin becomes the adoption of proliferated results in the progressing growth in the market rate of Bitcoin. Whenever the marketing strategies are working to spread, the technological aspects of the BTC gains the sight. The more people adopt BTC the demand will increase but with limited supply volume of 21billions including the reward program. This results in the price hick in the crypto-markets.
Community Influence
Bitcoin traders are also a big factor when it comes to pricing in the market. If traders wish to sell its bitcoin and the selling ratio is higher than the buy ratio then the price will reduce. Traders, developers, regulators all need to be careful with their activities if they want the currency to be top and escalating its growth.
North Korea has proposed cryptocurrency for the nation which will be economically regulated by the government. The process is very rapid and any time in 2020 we could expect another crypto-assets in the market.
That’s how you can estimate a BTC’s cost. As the fourth deduction will occur in 2020 at any moment, and the country regulation will also be tougher than ever before, BTC’s value will fluctuate in the coming days. Determining whether the price will reach the top-notch or go down below is not feasible. What we can expect for safety purposes to maintain updating ourselves.
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Competitors
Bitcoin is not the only cryptocurrency that exists in the market. More than 2800 are currently revolving in the market which holds the total market volume of $262,609,516,495 from Last updated on Sep 19, 2019. Where others have 32.5% of the total market. Although the bitcoin is still reigning in the crypto-market the percentage graph shows that the others are too entering in the market rapidly resulting in the decrease of the dominance of bitcoin over others.