As Bitcoin once again hit $10,000, many people have been left wondering how to find out if the market will lean bullish or bearish.
So let’s discuss the best ways to predict price shifts!
Cryptocurrencies have always been highly volatile as a result of the market’s young age. Not always you can accurately predict what will happen to Bitcoin for long term. However, short term predictions are easier to make if you understand one thing: what affects the Bitcoin price.
What affects Bitcoin Price?
When Bitcoin was launched at first, most individuals, companies didn’t have much trust in it. Many were quick to dismiss the first crypto coin as a scam. It was apparent to them that Bitcoin wouldn’t reach mainstream adoption and would just fade away.
Ten years later, the 400 millionth Bitcoin transaction took place and the number of crypto coin users is still growing daily both when the price is growing or not.
It is hard to deny now that Bitcoin has captured the hearts of many and it is here to stay. In the past years, many major companies began looking into prospects of crypto coins and the Blockchain technology. The list includes companies such as Facebook, Google, Microsoft,
Amazon and so on.
As large and trusted companies started taking advantage of these new technologies, consumers gained trust in crypto coins too. The higher the adoption rate, the higher the Bitcoin price gets.
Even though companies were very accepting of crypto, especially Bitcoin, in the past years, the same couldn’t be said for governments. Many jurisdictions have very strict regulations and laws, others, on the other hand, have banned crypto altogether.
Currently, there are 9 countries where using Bitcoin is a punishable crime and in some countries such as China, India and Indonesia, crypto coins are highly regulated.
Crypto regulations have been implemented quite late. However, now in most countries there is some form of laws regarding crypto transactions. Many regulations have large effects on the crypto market and the price since they directly influence the adoption rate of coins.
Cryptocurrency bans have a psychological effect on investors as the crypto market is highly decentralized and isn’t supported by a single entity. The rumor of South Korea’s cryptocurrency ban almost stopped Bitcoin’s price peak in 2017. As the market grows, these types of regulations or even gossip won’t have an impact on crypto-asset prices. Yet, currently, it’s interesting to watch on your coin checker as the price of a coin goes down when certain news or rumors surface.
3. The Media
Nowadays, most people get their information from social media and big tech companies control the narrative. The media has an undeniable influence on the perception of people.
When the Bitcoin price fell drastically, news outlets made sure to proclaim that crypto coins were a scam all along. After a bear market, as the media continues to vandalize the image of cryptocurrencies traders become more fearful of investing in crypto. The positive or negative coverage of the crypto market directly influences the price.
Overall, there are many factors that affect the Bitcoin price, but knowing these three primary ones you can make pretty accurate forecasts about the price of the first crypto-asset. And if you want to be an efficient trader using a coin tracker can always be helpful. Check out this amazing guide on using a cryptocurrency portfolio tracker.