The market of digital assets is an area where many investors are making money. Crypto trading and investments in cryptocurrencies have expanded its adoption worldwide due to the volatility of cryptocurrencies. Crypto price fluctuates on a daily basis, so you can earn from it in a short period of time, use different trading strategies, purchase promising cryptos, and hold them long term, waiting for the values to rise.
The digital market is subject to cycles, constantly growing and falling, forming bull and bear tendencies. In the spring of 2022, we all observed the market drop, which is also called a “crypto winter”. The downtrend is described by the following:
- Significant funds outflow from the cryptocurrency sector
- Declining demand for cryptocurrencies
- Falling rates
- Pessimistic moods.
Many people are asking: “What makes cryptocurrency price go up after the downtrend?”. The truth is that bullish tendencies always come to replace bearish ones. It starts with excitement around digital assets, new projects coming and advertising; demand increases and rates skyrocket as a result.
What Determines the Price of Cryptocurrency?
The relationship between supply and demand is the most important element of the digital market. In other words, the economic laws that apply to conventional markets also apply to cryptocurrencies. Cryptocurrency prices rise when coins are oversold (demand rises) and fall when assets supply exceeds demand. Generally, if a cryptocurrency has functional technology, people will want to purchase it, which drives demand. Those who own the assets and want to hold them without selling make supply limited. In other words, demand outstrips supply, and rates grow.
These actors determine crypto price:
- Media coverage
- Market’s competitors
- Technological value
- Real application
- Investors mood.
To increase the rate of cryptocurrencies, investors may intentionally buy large quantities, creating demand for cryptocurrencies. This phenomenon is known as a “pump,” and it is not an honest action. Conversely, when a large investor sells a large number of coins, demand decreases, and the asset price “collapses”. To learn how to use crypto price changes for successful crypto trading, welcome to the WhiteBIT blog.
Looking to profit from buying and selling cryptocurrency?
The key to success is to choose a strategy that suits your style of trading. You could opt for a daily strategy, scalping, swing, or long-term investment. Sticking to a strategy helps traders stay consistent and avoid making emotional decisions. Here are some tips for profitable trading:
- Don’t invest your last bit of money in crypto trading, as this can cloud your judgement.
- Only invest what you can afford to lose.
- Consider using automated trading programs.
- Take profits and avoid being driven by greed.
- Don’t dwell on missed opportunities, as this can negatively impact future trading decisions.
- Be cautious with leverage ratios, as the more funds you borrow, the higher the risks, and the more you could lose in the end.
- Use reliable crypto platforms with user-friendly interfaces.
- Store long-term investments offline and keep a portion of daily trading funds on a crypto exchange.
- Don’t forget your seed phrase for your crypto wallet.
- Keep up-to-date with the latest industry news and trends as the crypto market is constantly evolving.
Remember, the crypto market is constantly changing, so always stay informed and adapt your strategy accordingly.Copy textCopy HTMLRefuseTake to work