The cryptocurrency market is known for its extreme volatility, which can greatly affect prices. Some of the reasons that lead to these fluctuations:
Main reasons
1. Supply and Demand: Changes in supply and demand affect prices.
2. Government policy effects: Changes in government policies and regulations.
3. Impacts of the global economy: economic crises and fluctuations in financial markets.
4. Technology Effects: Improvements in technology and new developments.
5. Psychological effects: Psychological effects and suspense in the market.
Influencing factors
1. News and reports: News and reports about digital currencies.
2. Technical Analysis: Technical analysis of prices and trends.
3. Fundamental Analysis: Fundamental analysis of companies and currencies.
4. Automated trading: Automated trading of cryptocurrencies.
5. Competition: Competition between digital currencies.
Common fluctuations
1. Price fluctuations: sudden changes in prices.
2. Volume fluctuations: changes in trading volume.
3. Liquidity fluctuations: changes in liquidity in the market.
Trading Tips
1. Use technical and fundamental analysis.
2. Diversify your investments.
3. Use stop orders.
4. Avoid emotional trading.
5. Follow the news and reports.
Sources
1. CoinMarketCap
2. TradingView
3. CryptoSlate
4. WalletInvestor
5. Coindesk