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Several factors can affect the price of Bitcoin and other cryptocurrencies. For instance, when Google vowed to place a ban on all cryptocurrency-related promotions or advertisements, the cryptocurrency market shed over $60 billion. This must have wiped an entire trading balance of some traders who were not so fortunate during the drop in prices. So, you need to know the factors that can lead to remarkable price movement when trading cryptos.
Although the price of coins is not guaranteed to move based on these factors, you still need to consider them when investing in any altcoin. So, let’s take a look at some of the factors, please note that these are just some of them. Several other factors not mentioned here can also affect the market either positively or negatively.
Exchange Listing- When an exchange announces that they are going to list a coin, then the price of the coin will likely go up in anticipation of more traders having access to invest in the coin.
Software Upgrades- Software upgrades usually lead to improvements in the features of the crypto and also its use. For instance, Bitcoin transaction has been slow due to the volume of transactions. There has been several discussion regarding the upgrade of the core software functions of Bitcoin to increase the transaction speed. After a heated debate on this issue, Bitcoin Cash was created and the price of Bitcoin has reached new high since then. Software upgrades increases the value of the crypto and its practical use which translates into increased value and an upward price movement.
Improvement in Wallet- Remember, there are day traders and long term investors who want to buy cryptos and keep them for a long time. Such investors would love to store their currency in a compatible wallet that is safe. When wallet improvements are made, long term investors will be motivated to invest in the asset causing the price to go up. So, if a crypto lacks a good wallet but has great prospects, it will prevent investors that are less technical from buying it. However, as soon as a good and safe wallet is available, such currency will become more accessible to every investor and the value will go up. In the event that you discover a good crypto with a good team of investors and great application in real life but lacks a good trading signal, it might be an indication that it is currently undervalued. You can consider buying such currency shortly after the launch of its fist quality wallet.
Certain Government Regulations- This is one of the strongest influence on the price of cryptocurrency. For instance, it was rumored sometime that the South Korean government was planning to ban cryptocurrency trading in the country. Within few days of the FUD, the price of most cryptocurrencies declined greatly. The same applies to the ban on ICOs in China, in fact, certain ICOs were banned by SEC in the US as a result of signs of pump and dump that could happen to it.
When trading, watch out for the latest trends in government regulation and policies and if possible leave the market when you hear a strict government regulation because it could be a sign of a strong bearish market.
Public Hype- There are countless fake tweets that carry fake news causing the price of cryptocurrencies to move up or down depending on the news. So, this could either be good or bad. While you may find out that something is hype, always know that even hype also moves the markets and in the event that you decide to trade hype, then consider leaving the market before it cools down because when it has been confirmed to be a hype, a dump will take place.
As earlier mentioned, the factor that affect the price of cryptos are many, just make sure that you learn as many as you can and consider them when trading.
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