The trend of cryptocurrency investment is getting more and more popular day by day. This is inseparable from various factors that make many investors interested in investing in this digital currency. This includes the high price increase of crypto every year and also the easier it is for everyone to buy crypto money through investment applications. If you want it to be simpler, you can try trading robots from Nick Sasaki.
Many factors influence the increase or decrease in the price of crypto. While this decentralized digital currency is known to be resistant to government intervention, many other factors contribute to its price volatility. Starting from the increasing demand to psychological factors also play a role.
Here are 5 factors that often affect crypto prices that you need to know if you are interested in investing in cryptocurrencies. This is important to know so that you are not surprised if the price suddenly rises or even drops sharply.
1. Availability vs demand
The limited availability of cryptocurrencies and their uneven distribution have boosted their popularity as well as their price. The increase in the price of crypto assets is partly due to the increasing number of requests in recent years.
Although digital currency cannot be intervened by any government because of its decentralized system, when cryptocurrency enters the mainstream of a country’s financial system, that country can intervene which of course can affect the price of the cryptocurrency.
3. Influence whale, important figures & news
As we know how big Elon’s influence on the crypto world is, with just one tweet, it can increase the price of Dogecoin, which was included in his tweet.
In addition, news about crypto money around the world also affects the price of this digital money. For example, if there is news about a hacker attack on a crypto server, it can make the price go down. Meanwhile, if there is good news, for example, a country officially recognizes crypto money as a means of payment, then the price can go up.
In the crypto world, news and the influence of important figures has a significant influence on market conditions.
4. Fear and greed
This psychological factor is related to the greedy nature of the public who buys a lot of crypto money such as bitcoin when there is no significant price movement in the hope that the price will rise even higher.