The cryptocurrency market is extremely attractive for investors because it makes it possible to capitalize from just a small initial sum. The main goal here is to pick a worthy digital coin and use a reliable platform for investment. Obviously, understanding the market and strategies is essential when it comes to investments because when you know all the drivers and pitfalls of the market, you know what determines cryptocurrency price, are able to analyze those factors and are ready to react to them.
To see crypto prices real time, you may address one of the most popular resources – Coinmarketcap. It has all existing digital assets placed in the order you may set for yourself – market cap, price, and trade volume.
As you can see, crypto rates are extremely changeable. It allows people to generate income from those price fluctuations on a daily basis and in the long-term perspective. Let’s consider the factors affecting crypto rates.
What Influences Crypto Price?
Here are some factors:
- Supply of coins and demand for them
- Technology and use cases
- The market trend
- Global economy
- Reputation of a project.
What makes cryptocurrency price go up? The main factor that makes prices grow is increased demand. If the asset is valuable, people want to buy and hold it, so they purchase it, increasing the demand for it and decreasing the supply, which makes the crypto rate higher. During the bull run, all crypto rates grow. There is a buzz around digital assets, and demand starts to exceed supply. This simple rule works in the cryptocurrency market.
What makes crypto rates fall? Some large crypto platforms may collapse (like FTX in November 2022), causing funds outflow from exchanges and, thus, demand drop. General investors’ mood about the market also affects crypto rates. If they are pessimistic, they do not want to invest in crypto, so the market drops.
The best time to buy crypto is the market drop when crypto rates are low. It allows entering the market at the most profitable conditions and then selling assets when prices increase.