Just as every business has its up and downtrend which is caused by both seen and unseen factors that determine the market price. In the open market, the scarcity of any commodity plays a major role in determining the price of the commodity just as we have learnt in our study of economics. On the other hand, government policies play a huge role in the prices of commodities in the open market. For instance, if a government places a ban on the importation of any commodity at any given time, the price of such a commodity will be on the increase due to scarcity. This is also seen in the crypto space but it comes in another form.
Let us look at what happened to the DOGE coin. Anyone who was following the crypto news would have found out that DOGE coin witnessed a major pump just because ELON MUSK twitted about it. Now what happens is that in the crypto market, influential personalities play a major role in determining the price of any coin. Just imagine what will happen if the new president of America JOE BIDEN tweets about BCH and its potentials, it will surely affect the price of the coin positively.
Another thing that can affect the price of any coin in the crypto space is when someone invests very heavily in a coin thereby creating scarcity this makes the price of such a token to pump even higher and faster than it should. These big investors are known as WHALES and they are among the major price-determining factors in the crypto market.
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I remembered when the news of the lawsuit between XRP and SEC in America broke out, major whales dumped heavily and within a short period, the price of XRP crashed significantly even though it has started to gain momentum since then. This factor is also seen in the open market because once a business is known to have a pending lawsuit people tend to avoid going into it until the end of the lawsuit.
In the crypto market, prices are also determined by what is known as TOKEN BURN i.e. when a given percentage of the total supply of the coin is bought back by the owners or the developers of such coin to reduce the total supply in circulation.
This is done as a way to control the market inflation which in turn makes the coin to pump as a result of scarcity. Another one that I will not fail to point out is known as HALVING.
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It is that period when the number of a given coin that the miners receive is split in half. This also helps to reduce the amount in circulation which leads to a possible pump in the price of such token.
In all of these, every crypto trader must be ready to look out for a better time to go long or short as a way to leverage in whatever seasons he finds himself. Just a few days ago the market took a bearish turn and a look at the indices will portray a river of blood because of the fall that was happening in most of the coins.
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This is not the time for any crypto enthusiast to rush into selling off any coin bought out of fear of the unknown. It is a very clear thing that in the crypto market, the price can go bearish or bullish anytime and any day so if one has the understanding, he will know how to maximize every opportunity that comes. Right now, most trades and crypto dealers are seriously adding more coins in their crypto bags because this is the time for buying even though one is advised to do their research before buying any coin both in bear or bull period.
Now, I ask you. Have you added some potential coins to your bag? If yes then you are on the right track but if you have not then I will urge you to do so as fast as you can because the bull may not be so patient to wait out the bear before it decides to break through the market lines. For me, I have added more BCH
in my crypto bag and some other coins like BNB, JULD, ETH, 1UP, TWT, ADA and so many others. Fill your bag as much as you can because anything can happen at any time. You must learn how to leverage both the bear and bull period.
WARNING: THIS IS NOT AN INVESTMENT ADVICE, DO YOU OWN RESEARCH.
