The course of cryptocurrencies is formed under the influence of key criteria, namely supply and demand. It is easy to trace this, focusing on the price, which can either simply change, or fall off or rise sharply. Often such an effect is the result of the impact of secondary factors that can also change the situation not only within one crypto asset, but also on the market as a whole.
Choosing which cryptocurrency is right for you to invest and earn , the online price is tracked very simply on crypto exchanges. Please note that the cost will also differ on different trading platforms, as it depends on the rate of the last closed transaction. To assess the relationship between price indicators, it is necessary to analyze the factors and characteristics that have a direct impact on digital coins.
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What determines the course of cryptocurrencies : analysis of basic concepts
Price jumps within one day is a standard situation. It is often possible to single out even time periods when the cost either increases or starts to fall, as this depends on the activity and behavior of users.
Supply and demand
If you present a project and declare that a particular coin can be used to pay in any country in the world, it simplifies a number of processes and solves some important problem, then many investors will want to own it. Thus, demand will form for the coin, which will lead to an increase in its price, because everyone will offer more and more for the opportunity to own a crypto asset.
If users buy a crypto, work with it, and do not appreciate its characteristics, then they will start selling it, lowering the price, because they will want to get rid of the coin even for a smaller amount. Demand is a factor that is strongly influenced by marketing, therefore, its cost often depends on the positioning of the project.
The offer also has an impact on quotes. For example, if the number of coins is limited and their number is gradually decreasing, then you can count on an increase in the rate. What can provoke an increase in the price in the presented category:
- Burning some of the coins.
- Withdrawal to cold wallets.
This can affect the real-time rate of cryptocurrency, price online, as the number of users does not change, and the number of coins in circulation decreases. And vice versa, if the exchange issues, for example, 10,000,000 coins, then we should expect a drop in value.
Mining capability
This is not a straight forward factor that also affects the price. The rate is affected by the cost of production (price of equipment, payment for energy carriers). The lack of mining is already a reason for quotes to fix at a certain level or start growing.
Geopolitics and social networks
State restrictions, statements of famous people, PR strategy and other factors – something that can indirectly cause a short-term increase or decrease in prices. It is easy to track this using the exchange’s analytical panel, for example, WhiteBIT. On the marketplace, you can choose one project to understand how it reacts to any external factors.
