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

General Manager @ Excoincial Exchange

What drives up or down the price of digital assets?

First of all it's very cardinal to understand that cryptocurrencies or digital assets are very volatile in nature excluding stable coins. However, there are many factors that drive these digital assets up or down, Firstly is the issue of mass adoption by global institutions like Central bank digital currencies CBDC, this move makes the global market increase its trust and more interests to the investors. Secondly, Bitcoin EFT approval by SEC becames a dream come true for investors which they have been waiting for a long time. Thirdly, legalizing of these digital assets by countries like El Salvador etal, in short prices of these digital assets rise because of positive speculations or fundamentals. Digital assets also go down because of negative news and speculation from global leaders for example China cracking down on Bitcoin by banning it and closing down of mining operations, Nigeria's refusal to allow banks in trading Bitcoin and other currencies, Elon musk crack down on purchasing Tesla cars with Bitcoin. In conclusion, digital assets go up and down because of negative and positive speculations based on fundamental calls by adoption and crackdown that give investor confidence or distrust.

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

There are many projects with spectacular missions that have mushroomed on crypto sphere. However, there are several priority or construction that are make before choosing a project; - how powerful and dedicated is the team behind the project, - Has the team undergone any auditing certification, KYC/AML verifications, - How good is the community support for the project, - How's their roadmap and their whitepaper, - do they have enough liquidity for their currency and is it locked for a minimum number of 3years if it's a DeFi project, - Have this project partnered with several media houses and exchanges. Al these question and other analysis helps me consider effectively over what project I should invest in.

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.

OTC Deals. ICO Advisor at Cryotoknowmics, BITOZZ and More, Strategy, Investor Relations, Big Network in The Cryptospace

What drives up or down the price of digital assets?

Behind every market are actual real people. And those people go through specific cycles in their emotions which influence their behavior, which influences price action. Let me explain: If traders perceive, that the market is a bull market, they trade by betting on price going up and setting stop losses at certain levels. There are always bears and bulls fighting about price direction. Bears may then try to bring price down, but if the bulls are stronger, price will keep moving up. If the bears win, price will go down. Also the market so far, in crypto, moves in 4 year cylces. About one year after each BTC halfing we get a bull market, because BTC gets more scarce. After BTC , ETH and then the oher ALTS move up. Once the bull market peaks price will reach a low point approx. one year later and then consolidate for 2-3 yeas before the next halfing takes place and everything starts all over. This time, we have much more money in the market because of institutional investors looking to get their piece of the pie. This is why many people think,this cylce could extend much longer. Nobody knows for sure though. I don`t want to go on tooo long. Conclusion is: Emotions of traders play a huge role if prices rise or fall. Furthermore the whales(holders of a huge amount of a specific coin) play their "games" and can move the market, cause fake-outs and the like. And last but not least - the news that hit the market also have an impact on how people feel - which in return impacts their trading behavior/price movements.

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

Real use case of the project. Do they solve some kind of real problem. Is the team behind the projec able to actually pull it off? Do they have some hype or not? For short term: where is the token in it`s cycle? For long term: will the project be a real game-changer and be needed in the future?

IT Consultant / Certified Crypto Trader

What drives up or down the price of digital assets?

The main factor that influences the price of digital assets to rise up or down are: 1. The team behind the project, their capabilities on meeting the demands of the roadmap in conjunction with the maximum supply and circulating supply. 2. Staking also helps digital assets to maintain their price. When a large portion are on staking with incentives, holders will not want to catch out in haste 3. Regular updates with a huge social active community base also goes a long way. When there is a trading contest, new partnership, product release. Holders and supporters do share, retweet, like etc which makes such to get across to a large audience and adversely affects the price most often upward. 4. Institutional Adoption: When a large institution with huge merchants embrace crypto such as PayPal, Mastercard etc, this information is disseminated across millions of their users and many tend to join crypto through this which mostly leads to a price surge,

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

The team behind the project, their capabilities. I will now have an in-depth look at the roadmap if it's justifiable and be able to deliver as scheduled before goint to check on the tokenomics

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.

Worker

What drives up or down the price of digital assets?

For the price to rise or fall there are certain factors, such as the influence of famous people in the environment, such as Elon Musk, also what the cryto does, its function. and the constant updates of this. Marketing and people's trust is very important

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

The most important thing when choosing a token is its strength, legitimacy and support. Marketing is also important and the fulfilled promises of that token, bring confidence to people.

trader

What drives up or down the price of digital assets?

crypto will rise when the interest of buyers is getting bigger, many people are very confident in the project and the project is growing to form a community, this is one of the fundamental things of the development of the price of crypto coins

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

clear projects are usually written in white paper that makes sense, clear permits, concrete evidence nowadays there are many fraudulent projects and we have to be careful, we have to read a lot of news related to these projects

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.

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