cryptocurrency: Why is crypto going down? When crypto will go up? Factors influencing the price of digital assets

Airdrop Analyst, Trader

What drives up or down the price of digital assets?

I think there are several factors and as follow: 1. Availability vs demand the limited Availability of cryptocurrencies and its uneven distribution to increase its popularity as well as price. The increase in asset prices is partly due to an increase in the number of requests in recent years. 2. Adoption in the real world Many countries have legalized the use of crypto as a means of payment. The adoption of digital currencies into the real world, if done massively or at least legally in many large countries, will increase in value. This is due to the limited number of crypto assets. And by being adopted into real life, the demand will increase and of course trigger price increases. 3. Miner production costs The cost to mine crypto money is one of the determining factors for the price of the cryptocurrency. For example, bitcoin has a high production cost because it has to have special hardware which is usually assembled with classy and expensive hardware, CPU, GPU, server, and cooling system as well as electricity costs incurred. 4. Regulation Although digital currency cannot be intervened by any government because of its decentralized system, when cryptocurrencies enter the mainstream of a country's financial system, then that country can intervene which of course can affect the price of cryptocurrency. For example, China banned bitcoin mining throughout its territory, UK banned Binance, the world's largest crypto asset trading company, from operating in its country. There is also the discourse of imposing taxes on cryptocurrencies in Indonesia which is still being discussed by the relevant agencies. Interventions like these can impact crypto prices globally. 5. Important figures One of the most obvious examples is Elon Musk who often tweets about certain cryptocurrencies on his Twitter account. So great is Elon's influence on the crypto world, with just one tweet, he could inflate the price of Dogecoin, which was included in his tweet. 6. Fear and greed The greedy nature of the public who buys a lot of crypto money like bitcoin when there is no price movement means that in the future the price will rise even higher. The more people who buy cryptocurrencies, the higher the price of the cryptocurrency and this affects other people to buy bitcoins too. When the price of bitcoin has almost touched its highest price, many people are trying to make a profit by selling their bitcoins. The more people who sell their bitcoins, the more the bitcoin price will fall.

What’s your most important priority when choosing the right project/token/coin?

My main priority is that I must be consistent with the project and help it progress to a successful one. And when I hold the project, I must confidently not be easily provoked by other people/FOMO.

Blockchain | Web Developer

What drives up or down the price of digital assets?

I believe that the price of digital assets drives up the popularity of a given cryptocurrency, its usefulness and capitalization. If the project is promoted by a famous person, it can also help to increase the rate. When it comes to declines, emotions most often cause above-average declines.

What’s your most important priority when choosing the right project/token/coin?

When choosing the cryptocurrency I want to have, I am guided by the team behind the project and the chance whether the project will be useful in the coming years.

Crypto Trader

What drives up or down the price of digital assets?

The price of digital assets was highly dependent on mainstream news. A good or bad news affected the price of a digital asset severely. While a good news about a cryptocurrency or cryptocurrencies in general brought more investors to the cryptoverse, a bad news repelled some of them from the market causing a plunge in price. However, since Q4 of 2020 the mainstream media started covering the news about cryptocurrencies in a better way after institutional investors made it official about the crypto hodlings. Apart from rise of some meme coins caused by statements made by influential people, retail investors are more aware than before about investment of cryptocurrencies. Generally the retail investors now tend to understand the underlying technology around a crypto project instead of being a victim of pump and dumps. Though it is yet in a very nascent stage, yet its happening.

What’s your most important priority when choosing the right project/token/coin?

• I look at the roadmap • The activity of the community • The profile of the developer(s) • The project competitors • Usability • Incentives

Crypto researcher and writer- Copywriter

What drives up or down the price of digital assets?

There are several factors that influence the prices of cryptocurrencies. And here I will discuss a few of them. Breaking news: Some breaking news, especially involving cryptocurrencies or legislation influence their prices. For example, if the action of a government is positive towards cryptocurrencies, their prices rise and vice versa. For example, the decision by the Chinese government to ban bitcoin mining negatively affected the prices of BTC. The news that El Salvador has adopted BTC as a legal tender helped to increase the price of BTC. The recent bull run of BTC could have been necessitated by the news that United States has approved some BTC Exchange Traded Funds (ETF). And we have seen the number of countries approving ETF increasing. Market Sentiment: Market sentiment is about how buyers and sellers of a certain cryptocurrency think about it. For instance, recently market sentiment led to the rise of the price of Shiba Inu. If the market expectation is high on the possible rise of the price of a cryptocurrency, that has positive pressure on the price. Demand and supply of the cryptocurrencies: When there are more buyers of a cryptocurrency than sellers, the price of the coin increases. When the number of sellers of a cryptocurrency is higher than that of the buyers, the price increases. Fud: fear, uncertainty and doubt (FUD) negatively affects the prices of certain coins. On the other hand shilling has a short term impact on the price of a certain coin. Recently, we noted that once Elon Musk talked about a certain cryptocurrency in a positive way, its price would rise. Change in token supply: The change in the volume of the circulating supply of a coin may affect its prices. When the supply of a token decreases, all other things being constant, the price of the token increases. That is the reason why come projects burn their tokens at an established rate. A burnt event decreases the supply of the token, hence positively influencing its price.

What’s your most important priority when choosing the right project/token/coin?

Personally I look at several fundamentals of the coin. One of the things I look for is the network it exists on. I normally favour projects on Tron blockchain and Binance blockchain. This is because of the cost of transactions. The exchanges where the coin exists: I like a coin that is on several exchanges that include decentralized exchanges and centralized ones. This gives people much flexibility when trading the coin. Liquidity of the coin: I prefer a coin which has high liquidity. This means that orders are easily fulfilled in short time. The team: I study the team behind the project and its history. A good team should have balance in terms of expertise and experience. A team made of people of different age and sex is appealing to me. The country in which it is registered is also very important to me. Ranking: For an already existing coin I look at the trading volume both in the short term and in the distant past. The market capitalization is also important to me. Therefore, I normally choose coins which are within the top 20 rank according to market cap at CoinMarketcap or CoinGecko.

Community Case management worker, crypto trader

What drives up or down the price of digital assets?

Bitcoin is the face of the cryptocurrency market. And the majority of price movement within the market is dependent on Bitcoin’s success or failure. For example, most altcoins face volatility when Bitcoin begins to drop. Anything from negative press to government crackdowns can cause a chain reaction that leads to a crypto crash. At the moment, Bitcoin is trading around $60,000 after hitting lower value down to $20,000. Apart from Bitcoin's influence there are other salient factors like government crackdowns and the resulting backlash have led to market uncertainty and volatility like right now in my country Nigeria as the government suspend any crypto transactions which led to right now closing down all bank accounts of citizens suspected to be into crypto currency transactions which in the long run could affect the price of tokens.

What’s your most important priority when choosing the right project/token/coin?

How Useful the Coin is? Unlike the stock of a company, you can’t assess crypto coins. The best way to assess a crypto coin is to check its utility. Check how useful the coin is in the real world. Whether it is solving any problem or does it have any real-world utility? For example, crypto coins like Ethereum used for transactions, payments, smart contracts, etc. These utilities simplify the agreement and settlement between businesses. This allows a platform between two businesses to make financial transactions more effectively. Therefore, measure the potential of a new coin by comparing it with other similar coins. How is it performing, what are the problems it is solving? What is the Purpose of the Coin? Check out the official website of the coin, you will find the purpose of the coin in the whitepaper. check their blog. Note, if you don’t find any information on its purpose or the site is full of only marketing stuff, then reject the coin. Analyze its Competitors Another important factor is to check its competitors. Where does it stand as compared to similar kinds of tokens or coins in the market? Remember while you consider his competitors, make sure to check the life-cycle of the coin too. Demand- Supply While checking the utility of the coin, you will figure its demand. In fact, a rise in demand ensures rise in its value. On the other hand, a high supply can reduce its price. However, a fixed supply is a good investment option in the crypto market. But ensure that the coin solves a real-world problem. Market Cap and Founder’s Holding It is crucial to check the market capitalization. Because market cap ensures liquidity, and liquid coin performs better. Another important part is to check the total holdings of the coin by the founder. This increases your trust factor before investing. When the founder of a coin holds a large amount of the coin, then it is a good sign that they believe in their project. Valuation Valuation gives you more clarity. A cheap coin does not mean that it is a good option for investment. There are other factors that must be considered while analyzing their valuation. When the price is higher than the number of users using it, then it is overpriced.

Crypto and Forex Trader

What drives up or down the price of digital assets?

As a rule, bitcoin pulls on itself the entire cryptocurrency market as a whole, positive news about the main cryptocurrency is growing, and all the rest. The factors affecting cryptocurrencies are very different from those affecting traditional financial instruments. The exchange rate is strongly influenced by the assumption that, perhaps, the government of some country will allow the circulation of cryptocurrencies. There are two main differences between cryptocurrencies and traditional assets - a large number of OTC / hidden transactions and a large amount of news related to the regulation of the entire industry. The news background is a strong price engine, but OTC market transactions in fact determine the target values of Bitcoin in the short term. The news background has a general effect on the entire cryptocurrency industry, this is a statement or reports of regulators regarding cryptocurrencies. The leader is the US Securities and Exchange Commission (SEC), which has a severely negative stance towards any type of cryptocurrency.

What’s your most important priority when choosing the right project/token/coin?

Development team. White Paper. It is important to study the past of the project team and who is behind it. Determine how interesting and promising the underlying idea is. Check for MVP availability Check the execution of the roadmap. Get to know the project community. Determine the market value of the project. Assess the market segment to which the project belongs. Therefore, it is extremely important to choose projects that develop a real product and have a fundamental basis for growth.

Crypto Trader

What drives up or down the price of digital assets?

In my opinion, these are the most important factors controlling the rise in prices of digital currencies: -Understanding the value of a cryptocurrency. -Cryptocurrency supply and demand. -Cost of production. -Cryptocurrency exchanges. -Competition. -Internal governance. -Regulations and legal requirements. -Finding value in cryptocurrency.

What’s your most important priority when choosing the right project/token/coin?

1- Approved Blockchain Technology and Problems to be Solved. 2-Project team and community. 3-Available Liquidity. 4-Project partners. 5- The team’s ability to create a niche within the crypto community. Taking into account the general condition of the market and the extent of saturation of the market or not.

Blockchain enthusiast, interested in crypto projects that are solving real world problems.

What drives up or down the price of digital assets?

The demand of a particular cryptocurrency would determine if the price goes up or down, also market factors that are uncontrollable could also have an effect in price movement

What’s your most important priority when choosing the right project/token/coin?

The project use case is of utmost importance in this ever evolving cryptospace. Does it meet a current need? Would the project survive the next decade or between still couple of years due to the current usecases it offers? These are some of the questions that come to mind when talking about usecase of a project

Self Employed

What drives up or down the price of digital assets?

It all depends on the Market value of the blockchains and cryptocurrency’s value which affects the rise and fall also known as drives up and down

What’s your most important priority when choosing the right project/token/coin?

The most important priority when choosing the right project/token/coin is The future estimate or prediction of the price or value of the token coin

Student

What drives up or down the price of digital assets?

There are several things that affect the rise and fall of the price of Crypto Assets, some of which are as follows: The price of Crypto Assets depends on the balance of supply and demand. This is the law of the market. When a Crypto Asset is popular and in high demand then its price will go up. Vice versa, if supply is high while demand is low, prices will fall. News or media coverage can affect the price of Crypto Assets. An example is if there is news about hacker attacks on crypto servers, or even good news about increasing adoption and infrastructure behind crypto technology. Crypto Asset price volatility is largely based on hype which often keeps interest high. The sharp drop in price can be affected by a post on social media and a deliberate remark of a famous person in the Crypto Asset world. In the area of ​​Crypto Assets, news really has a significant influence on the situation on the market

What’s your most important priority when choosing the right project/token/coin?

the steps I take are following the community, fundamental analysis, technology, whitepaper and vision. Every time a new cryptocurrency is released, they usually issue a white paper as well. It will outline the coin's purpose, technology, how it works, and the overall vision. The vision of cryptocurrency is very important, because to ensure how the existence of this coin is at least 5-10 years into the future. Without a clear vision and mission, the coin will struggle to become a real competitor or disruptor in the industry.

This is not a financial advice. Please do your own research and consider the risks of trading cryptocurrencies.