Factors affecting Crypto price.
Crypto works Purley like any other commodity in financial world which base on some principles of economics. Financial markets of any form even vegetables & fruits market depends on the basic rules of economics.
There are lot of factors which affects the price of commodity in any market of the world. Crypto is slightly different and sensitive then Gold , Silver or fiat due to its decentralized autonomy. I will divide the factors into three slabs which are affecting the price of Crypto like Bitcoin, Solana, Bitcoin Cash , Ethereum and LTC.
- Demand and supply base affects
- Internal affects
- External or international affects
Demand and supply base affects.
The basic and most authentic fundamental rule of any market is demand and supply. We know that whenever demand goes high for any thing, it's price goes up. Exactly same happens in Crypto, in simple Words, if sellers are more then buyers the price will decline and if buyers are more then sellers the price will pump. Here some coins like Bitcoin and Bitcoin Cash has fix supply but lot of tokens didn't like Ethereum. The demand rises always by marketing, international geopolitical situations and financial strengths .
Internal affects.
Each project has its internal conditions, governance base elements which fluctuates the price index and figures. If we count the elements, may it not possible because each token has different internal structure and function but over all campaigns on social media, Halving season like Bitcoin in next April, competition with other projects, cost of mining, nodes, listing on more DEXs, adoption of token and core team made the affects on the price.
The price of token also get wings when a strong community developed which always stand with as loyalist in any situations. Adoption ,especially institutional adoption, of any token create utility and store value which helps pricing sustainability as Bitcoin Cash achieving in case of EDX. In case of Solana and others the institutionalised adoption and payment methods also gives pendulum to price index.
External or international affects.
It is most dangerous part of affects which has very serious , quick and stunning affects on Crypto market. Even fake rumours, false news , unrealistic tweets and influencers talking , Billionaire's press release like Elon musk, Zuckerberg and Amazon included in affects.
Financial governance, regulations by authorities, wars like Russia - Ukraine and Lebanon - Israel, energy crisis, interest rates, inflation, top 5 mind set ( top 5 country's heads included USA, Russia, India, France and China). Then Security and exchange commission implementation of laws leading to price fluctuations as well. As happened to BCH and SOL in current lawsuit against Kraken where these coins falls in security.
Whales 🐳🐳 is another strong affect on price which are owning more then 50% of total assets. Just like Bitcoin only , the few whales ( big investors) has thousand of Bitcoins in Thier portfolio and movement of whales in either direction made some trembling waves in any token within some hours.
Exchanges also play vital role in crypto price index. They support to their native tokens like Binance to BnB and Tether and manipulate the FUDS. The heavy liquidity or sequencing position hits on price either way.
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Definitely there will be more affects too which leave impact on pricing of Crypto but generally I recognise the above ones.
That's all for today, like, upvote and leave comment for feedback. I will be pleased to see your generosity in tipping where you can donate in SOL and bulb.
Note: The article also published on read.cash
Title image taken from Pixabay
Cheers,
Amjad
