In the cryptocurrency market one thing is well known, namely its volatility. The existence or non -existence of the proportion of increasing and lowering prices are impossible to confirm. Both types of cryptocurrencies are affected - both with a high value of bitcoin and low price - Dogecoin. Many investors help themselves in trends to make a profit. However, they are not completely accidental. This market, similar to any other market, presents various cycles these being influenced by a combination of factors.
In this article we will detail how financial news influences the cryptocurrency market. It is important for you to keep up to date with these news in order to make decisions on time, on your virtual wallet.
The influence of news on the price of Bitcoin and the trend on the cryptocurrency market
There are two main trends in a complete market cycle: the ascending and descending one. The ascending one, is also called Bull Market, is characterized by the gradual increase in prices, when the interest in the market also increases. Investors begin to sell, motivated by the price increase, but also by the fear of missing the wave that could make profit. After the Bull Market period, in which the activity is increased, follows the downward trend - Bear Market. Prices begin to decrease as a result of market saturation, which is also influenced by investors skepticism on the current market stage. The cycle begins again when the process and costs reach a limit.
The impact of positive news on cryptocurrency price
Positive news can generate rapid increases at the price of bitcoin or other cryptocurrencies. The crypto market is generally sensitive to new information, because investor reactions make cryptocurrency price fluctuates. The phenomenon is present regardless of the cycle in which the market is located. Moreover, Bitcoin growth brings with it the growth of other cryptocurrencies.
Favorable regulations
When a large company or country announces the adoption of cryptocurrencies, both demand and trust in that cryptocurrency increase. Therefore, cryptocurrency price increases, and the market is in ascendancy. For example, when El Salvador became the first country to accept Bitcoin as an official currency, Bitcoin value increased. Similarly, Bitcoin Price has had a significant increase when Elon Musk has announced that Tesla will begin to accept Bitcoin as an official payment method.
Institutional investments
When massive capital is introduced into the market by a large investor, in which people trust, such as corporations, Bitcoin price increases automatically. This is because Bitcoin becomes an investment object. A clear example that illustrates this is the Americans from Microstrategy who own 244,800 bitcoin, and recently bought $ 1.1 billion. In order to reach this achievement, the company sold from its ordinary stocks to buy bitcoin. (information taken from this )
Impact of negative news on Bitcoin price
Negative news leads to the withdrawal of capital from Crypto Square, which creates a greater offer than demand. Also, the declining prices also create a general panic, and the market can only take it down. Whether it is a decrease in cryptocurrency slow or fast price, the market reaction is inevitable from negative news.
Government prohibitions and unfavorable statements
In 2021, the Chinese government announces the prohibition of mining and cryptocurrency transactions. Because much of the cryptocurrency computing power was in China, the news caused a huge decrease in the price of bitcoin. The panic created reduced somewhere to 30% of the value of Bitcoin within a few days.
An impact not so much, but it was considerable to have Elon Musk's statement on Twitter on Bitcoin payments. Also in 2021, he announces that Tesla will no longer accept the payment with Bitcoin, although during the same year he said the opposite. Elon Musk's posting led to an immediate 10%decrease in Bitcoin.
Technical problems
In 2022 Cryptocurrena Solana (Sol) suffered a decrease in 96% compared to its November glory period 2021. The fall of cryptocurrency was caused by different factors:
- Falling a trading platform called FTX, associated with soil cryptocurrency
- Slope Wallet, considered to be the main soil wallet, causing a loss of approximately $ 4.5 million
- He lost most of the developers who worked for the project, leading to a stagnation and insecurity for investors who were closely following cryptocurrency
Currently, the price of cryptocurrency has returned to $ 137.99, but this is the perfect example that shows us how negative news and events lead to a project.
How do you keep up to date with the news about the cryptocurrency and Bitcoin Romania market?
- Sites with financial news and Crypto Square: Follow sources that deliver the news quickly and correctly. You can also subscribe to newsletters for extra information. It is essential to follow the news constantly. It transforms this into a habit, so you will be able to make the correct decisions without too much pressure.
- Social networks and forums: There are a lot of groups on Reddit and X accounts where you can get your information and read opinions. You can find a group or thread that is suitable for any cryptocurrency arouses your interest.
- Cryptocurrency platforms: Platforms such as Abarai treat different topics in the crypto world in the form of blog items. Visit us the blog to find out about other curiosities.
In conclusion, news plays a very important role in the stability and possible fluctuations of the market and cryptocurrency. As I mentioned in the article, certain news can break a cryptocurrency or help it grow in a very short time. In most cases, events that influence Bitcoin price cannot be anticipated, and the general reaction of investors in crypto, or small or big, dictate how the prices will fluctuate. If you want to have freedom of decision and an almost instant transaction speed, use Abarai. Our platform is dedicated to people who want to trade cryptocurrencies in a short time, without making checks.
