The price of Bitcoin and other cryptocurrencies has been on a wild ride. What are the top six reasons why crypto prices go up?
The why crypto market is going up is a question that has been asked many times. There are many reasons why the price of cryptocurrency goes up, but there are six main reasons that most people agree on.
Have you ever noticed how bitcoin values fluctuate seemingly at random? The variables that influence cryptocurrency values are not only significant, but they may also be used to make money. TotalCrypto will look at the main variables that influence crypto values and explain the methods we use to profit from them.
Reason 1: Is A Crypto’s Availability
The principles of supply and demand are mostly responsible for cryptocurrency price rises. Simply said, the greater the number of individuals who do cryptocurrency trading, the higher the demand and price will be.
Yes, emotions like as hype have a part in cryptocurrency demand. However, we must acknowledge that most individuals are averse to opening new accounts on unfamiliar exchanges in order to get access to a new cryptocurrency.
What do the majority of investors do? They wait for the new cryptocurrency to be offered on an exchange where they already have an account before purchasing it.
Most cryptocurrencies do not get a large exchange listing immediately soon after their initial coin offering. Instead, these cryptocurrencies are often listed on smaller exchanges first, followed by bigger platforms like Binance.
As an example, consider Holochain: It was openly traded 18 days before this article was published, after it initially emerged from an ICO. HOLO has been listed on four separate exchanges since it first went public: IDEX, Hotbit, Fatbtc, and Radar Relay. Which of these bitcoin exchanges are you familiar with? You’ve probably never heard of any of them.
In the world of cryptocurrency, brand credibility is crucial. Unknown exchanges have burned many veterans in the bitcoin markets. In February 2018, the unnamed exchange BitGrail was hacked, resulting in the loss of $195 million in Nano tokens.
Given this, it’s no surprise that many crypto investors shun tiny exchanges in favor of waiting for new coins to be launched on larger platforms like Binance.
What Are The Consequences Of A Major Exchange Listing?
Binance is now the largest exchange where a cryptocurrency may be listed. We’ll look at QLINK, which was initially listed on Binance on March 26, 2018, to see how powerful a Binance listing may be.
Binance has announced the launch of QLINK.
On March 26th, what happened to the pricing on QLINK? The first thing you’ll notice is that the price of a token has risen from $0.109 to $0.24. Because of a Binance listing, the price of QLINK increased by 120 percent. You’ll see that the price quickly rose and then quickly dropped. Overall, QLINK benefited from the Binance listing, as shown by the substantial rise in trading volume.
These Binance listing surges occur on a regular basis. Almost every time, the listed cryptocurrency’s price rises and eventually settles at a higher level than before the listing. On May 2nd, 2018, Loom Network was also listed on Binance.
Binance has announced the listing of LOOM.
What occurred, do you think? The price of LOOM jumped from $0.295 to $0.756 per token on the day of its Binance debut. At the top, that’s a 156 percent price rise in a single day. The significant increase in price, like with most Binance postings, was just temporary. LOOM, on the other hand, was still trading at a higher level than it was before to the Binance listing.
You are welcome to investigate the effect of large exchange listings for yourself. You should see a typical trend of a large spike followed by a pullback to a position higher than before the listing.
How Can You Profit From The Massive Exchange Listing Boom?
The TotalCrypto Team takes advantage of Binance listings by purchasing potential cryptocurrency projects prior to their inclusion on the exchange. If a Binance listing is announced, we simply move the cryptocurrency to Binance and sell into all of those purchase orders, waiting for the price to fall. Once it happens, we’ll be able to rapidly reinvest and grow our token holdings in the project.
The key is to locate reputable cryptocurrency exchanges that offer currencies soon after they emerge from an ICO. Kucoin is heavily used by TotalCrypto for this reason. QLINK was the first cryptocurrency to be openly traded on Kucoin. It had been almost three months after Binance had listed the project.
QLINK has announced the addition of Kucoin to its exchange.
It is definitely feasible to make a lot of money with Binance listings. However, before making any actions, we suggest that you do research on lesser exchanges. In contrast, if a new interesting cryptocurrency gets launched on Binance, it is usually a good idea to hold off on purchasing it until a more fair entry price becomes available.
Reason 2: The Cryptocurrency Rumor Mill
It’s important to be aware that the cryptocurrency markets are rife with false news, hacks, and hype. Crypto may be the only sector where an announcement about an announcement is commonplace.
It’s typical in the cryptocurrency world for projects to announce upcoming “huge” news, causing the price of the cryptocurrency to skyrocket. Verge produced one of the largest news-driven pumps in April 2018. The announcement was made as follows:
The cryptocurrency Verge (XVG) has made an announcement.
For weeks, investors tried to figure out who the relationship was with by speculating on the internet.
The internet is buzzing with speculation about the Verge (XVG) collaboration.
Verge was selling at only $0.05 per coin on April 5th. In the end, Verge delayed the announcement out to April 17th, and the price peaked at $0.11 per token. Based on partnership conjecture and excitement, the Verge price increased by 120 percent in less than two weeks.
What happened to the price of Verge? Well, the price has plummeted. Falling from $0.11 before to the news to $0.069 thereafter on the same day. To put it another way, owing to the partnership announcement not meeting expectations, Verge lost 37.2 percent of its value in a single day.
How can you profit from the rumor mill around cryptocurrency? Well, at TotalCrypto, our approach is to purchase the rumor and sell the news. We see bitcoin values rise rapidly in expectation of ‘big news’ on a regular basis. When news emerges, it typically falls short of expectations, and the price drops to more realistic levels.
Substratum’s Twitter account has been hacked
The 2nd of May 2018 Substratum Twitter hack demonstrates why you shouldn’t always trust what you read and the extent to which certain individuals would go to influence a cryptocurrency price. The SUB coin will be introduced to Coinbase, according to a statement published on the official Substratum Twitter account.
Substratum’s Twitter account posted a fake Coinbase listing announcement.
The story was not backed up by any Coinbase sources, which should have triggered a red flag right away. Many investors, on the other hand, leapt on the news, believing that the rumor was true and that the Substratum price would skyrocket. Within minutes after this phony statement, the price of Substratum jumped from $0.84 to $0.97 per token. This flash price rise was 15.47 percent in percentage terms, and the price rapidly dropped below pre-announcement levels after the story was proven to be false.
The Substratum staff, fortunately, responded swiftly and disclosed that they had been hacked. Needless to say, their token price plummeted as a consequence.
Substratum has notified the Twitter community about the breach.
The takeaway here is that every piece of information you use to make bitcoin investing choices should be cross-referenced. Remember that things aren’t always as they appear, and many individuals are financially rewarded for spreading false information.
Reason 3: The Social Media Bandwagon
Many excellent social media influencers are passionate about cryptocurrencies. Fundamentally, a crypto YouTuber should speak about cryptocurrencies or ICOs in which they have personally invested and are enthusiastic about.
The other side of this is that large-follower influencers are more likely to unintentionally boost the price of cryptocurrencies they are interested in.
Naturally, a percentage of a YouTuber’s audience will be influenced by an influencer’s excitement for a cryptocurrency and will want to invest in it. Some YouTubers have over 200k subscribers, and their support for a cryptocurrency may result in millions of dollars being invested in the project.
The issue is that when a “hot tip” is provided, a large number of people in the audience will all run out and purchase bitcoin at the same time. A surge in demand typically results in a price rise. As a consequence, many investors purchase at exorbitant prices.
The TotalCrypto team has a lot of admiration for certain social influencers. However, if many influencers are recommending a cryptocurrency, we prefer to avoid it until the excitement has died down. Yes, you may miss the train as a result of this. But keep in mind that there is always another cryptocurrency train to board, and that not purchasing at all is a much better result than buying too high.
Be cautious of social influencers. It doesn’t imply someone is excellent just because they have tens of thousands of members. Indeed, many YouTubers duped their viewers into falling for the Bitconnect scam, and many individuals lost a lot of money as a result.
Rather than simply following the ‘tips’ of other influencers, TotalCrypto’s approach is to invest in projects we enjoy and believe in. Make use of influencers to bring intriguing ideas to your attention.
Reason 4: Support for Hardware Wallets
A hardware wallet is the most secure method to store bitcoin, and the two most popular models are Trezor and Ledger. Many investors are hesitant to acquire large holdings in cryptocurrencies that they are unable to store safely. This implies that when a new cryptocurrency is enabled by a hardware wallet, the price of that cryptocurrency will rise somewhat.
Keep up with the most recent cryptos supported by Ledger and Trezor.
1) The Trello Board for the Ledger Team Shows You What The Team Is Working On.
2) Everything the Trezor guys are working on is revealed on the Trezor Github.
Reason 5: Milestones on the Roadmap, Rebranding, and Conferences
A roadmap outlining the project’s milestones can typically be found on each cryptocurrency’s website. The introduction of a cryptocurrency’s main net is an example of a significant milestone. Approaching roadmap milestones, rebranding, and conferences all have one thing in common: the anticipation of these events typically results in a price rise.
When it comes to these kinds of occurrences, the TotalCrypto Team prefers to purchase the rumor and sell the news. Sure, there are instances when holding would produce a higher profit, but you don’t face the danger of disappointing the crypto community.
Reason 6: Pump & Dump
A pump and dump, to put it simply, is a kind of bitcoin market manipulation. Typically, this is a group of individuals who join together to manipulate the price of a cryptocurrency.
The pump is initiated when a large number of people purchase something at once, causing the price to rise. The firm believes that when the price rises, investors’ fear of missing out (FOMO) would drive them to purchase. The pump-and-dump gang will then benefit by selling into the FOMO crowd.
The TotalCrypto team has devoted an article on pump and dumps, including how they operate and how to detect them. We strongly advise you to educate yourself on the subject and how to prevent getting dumped on.
Conclusion
The reality is that, rather than underlying fundamentals, cryptocurrency markets are presently driven by emotion and anticipation. In a new market like bitcoin, this is quite normal. If there was never a price-technology gap, every new technology would be highly undervalued.
TotalCrypto believes that things will change in the future, and that crypto prices will be driven more by underlying fundamentals.
The six factors mentioned above, according to TotalCrypto, are the primary drivers of cryptocurrency price rises in the crypto market. External economic factors have a significant effect on cryptocurrency pricing as well, but we’ll go over that in more detail in another post.
TotalCrypto recognizes that cryptocurrencies are both an exciting and frightening prospect.
Our goal is to assist you in navigating the cryptocurrency markets. Every day, the team analyzes and researches cryptocurrencies so that we can share our findings with you. Sign up for our weekly email if you want to stay on top of cryptocurrency market trends, news, and more.
DISCLAIMER: The activity of the cryptoassets discussed in this paper is uncontrolled. This post is not intended to provide financial advice. Always do independent research.
The why bitcoin is rising is a question that has been asked many times. There are many reasons why the prices of cryptocurrencies go up, but the most common one is speculation.
