Steemit Crypto Academy Contest / S14W2 - Volatility in cryptocurrencies.
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Volatility is the nature of cryptocurrencies that makes investors make either losses or profits because it is all about how much and how quickly the value of cryptocurrencies can make a change unexpectedly at any anytime.
In your own words, how does volatility affect cryptocurrencies? Is it beneficial or detrimental?
Volatility is what measures how far the price of cryptocurrencies has moved up or down. I.e. how much and how quickly the value of cryptocurrencies can change in a given period.
With volatility in cryptocurrency, it means I can lose money easily just as I can make money easily in cryptocurrencies. Based on the volatility effect of cryptocurrencies people are afraid to invest in cryptocurrencies.
Volatility affects cryptocurrencies by making the value of cryptocurrencies fall which leads to losses in cryptocurrencies. For example, the price of STEEM is currently $0.2534 which before this current price Steem has moved up to $0.383 and above within this year.
Volatility affects the price of cryptocurrencies making the value of cryptocurrencies unstable which in the end investors lose their funds which we have seen from the chart how the value of STEEM/USDT has been moving up and down.
Volatility affects cryptocurrencies, by scaring investors away from investing in cryptocurrencies. In the crypto market, when trading on futures contracts you can make on profit, and in the next few minutes, your account can become liquidate. This volatility affects cryptocurrencies by liquidating the value of cryptocurrencies.
The value of cryptocurrencies is determined by demand and supply, in the market, and the sentiment of traders and investors who are ready to invest in cryptocurrencies and also government rules & regulations, economic factors, company performance, and media hype are the factors that contribute to why cryptocurrencies are faced with volatility.
Is it beneficial or detrimental?
Volatility is beneficial to cryptocurrencies because, without volatility in cryptocurrencies, some people can't be able to buy cryptocurrencies. Volatility makes it possible for investors to buy cryptocurrencies whenever the price has fallen without volatility in cryptocurrencies people would find it difficult to invest in cryptocurrencies.
Also, volatility is beneficial to cryptocurrencies as it brings about profit or loss to investors. It provides investors and traders with entry points which is beneficial. When there is a downward market movement of a certain cryptocurrency, it is an opportunity for investors who believe that the price of the cryptocurrency will rise back, in the long run, to buy the cryptocurrency as the price is low.
For instance, as a trader, I can buy a cryptocurrency for $100 that was valued at $200 previously and sell it back when the price of above $100. Investing in cryptocurrencies when the market is volatile can be an opportunity for investors to make profits.
Name and describe a technical indicator that measures the market volatility of an asset.
| Average True Range (ATR) |
|---|
The average True Range Indicator is the best indicator that measures the market volatility of an asset like cryptocurrencies and other tradable asset. It is a price volatility indicator that shows trading the average price variation of cryptocurrency or any asset within a given period.
As a crypto or forex trader you can use the ATR indicator to determine the best time for you to trade since it can help you to take the gap in the movement of price in whatever cryptocurrency that you want to trade.
| How to read Average True Range (ATR) |
|---|
Reading or interpreting the average True Range is a very easy must especially if you know how to calculate the indicator. The indicator identifies both high and low volatility in the market.
When you see that there is high volatility, it means the market is experiencing price fluctuation.
When you see low volatility, it means the market is experiencing a little price change.
Also when you see that there is a high price fluctuation in the market, you should know that the risk and rewards potential is high since the price may likely rise faster and fall within a short period which is an opportunity for traders to buy or sell immediately.
Describe the step-by-step to be able to include this indicator in the STEEM/USDT chart. You can use the Tradingview platform. Show screenshots.
To be able to include the Average True Range (ATR) indicator in the STEEM/USDT chart is very simple. Here I will be using Tradingview Platform to show you how to do that step by step.
The first thing you are to do is to create an account with Tradingview if you haven't done so and launch your chart which you will then select STEEM/USDT pair. Now let's assume you know how to do all this or you have already done it, you can follow the steps shared to include the ATR Indicator in the STEEM/USDT chart.
Step 1: On your chart click on "Indicator" at the right-hand top of the chart.
Step 2: At the pop-up window that is shown to you, you will see a list of indicators and also a search box, which you can type in the words "Average True Range and select the Average True Range Indicator Indicator.
Step 3: After you have selected the ATR Indicator, you can customize the indicator to the best way that suits you using the settings parameters and tap on OK to add the indicator to the indicator to your STEEM/USDT.
Explain in your own words, what happened to the volatility in the last month of the STEEM/USDT chart.
Let's take a look at the chart below and see what happens in November which is the last month of the STEEM/USDT chart.
From the above chart, it shows that in the last month (November) STEEM/USDT began with a green candle and the market was bullish as at last month (November) when STEEM/USDT recorded a last high of $0.336. After this movement of $0.336, there was a retracement which pushed the price of STEEM/USDT down to $0.235 as shown in the screenshot.
Looking at the above chart it means the market began with a bullish trend and ended with a bearish trend which is currently low as compared to that of November.
Do you think the future of cryptocurrencies is more stable? Give your own opinion.
Yes, I think the future of cryptocurrencies is going to be more stable. The reason is cryptocurrencies are becoming popular day by day which is the reason why I think it is going to be more stable in the future.
Looking at what happened with the CEO of Binance recently people are thinking the crypto market will go bearish which doesn't, but instead, we are experiencing a bullish market.
In the future, there will be more use cases of cryptocurrencies which will make cryptocurrencies more stable in the future.
The government is fighting to regulate the market so it will be more stable. In the future cryptocurrencies will be more stable as they will be traded on a traditional exchange and accepted by merchants.
@dave-hanny, @chant, and @kuzyboy I am inviting you all
Saludos hermosa amiga jasminemary, buena participación.
Como indicas la volatilidad es natural en el mundo de las criptomonedas, estas siempre están presentando volatilidad en sus precios, ya sea a la baja o a la alta de sus precios, esto puedo ser riesgo para algunos pero para otros presenta beneficios que se traducen en ganancias, el ATR es uno de los indicadores que miden o nos muestran la volatilidad, por ser uno de los más fácil de usar es uno de los más populares y recomendados, excelente explicación en el gráfico.
Te deseo éxitos y bendiciones.
I appreciate your support. Thank you.
Upvoted. Thank You for sending some of your rewards to @null. It will make Steem stronger.
Hey friend, greetings.
I appreciate your active participation and your insights on volatility in the world of cryptocurrencies. You're absolutely right that cryptocurrencies are known for their price fluctuations, which can go both up and down. This volatility can be seen as a risk by some, but for others, it presents an opportunity to make profits.
You mentioned the ATR (Average True Range) indicator, which is a popular and user-friendly tool for measuring volatility. It's great that you found it helpful and explained it well in the graph.
I wish you success in the contest. Good luck
Thank you for the support you have shown me.
Your post has been successfully curated by @sduttaskitchen at 35%.
Thanks for setting your post to 25% for @null.
We invite you to strive to publish quality content.
It could qualify you to be nominated for the weekly Top of our curation team.
Burning STEEM by sending it to the @null account helps reduce the supply of STEEM and so increases its price.
Hello jasminemary.
You have explained about volatility in your own words and You have put great efforts in your post and I appreciate your efforts. ATR Indicator is one of the best indicator for measuring volatility in the market and It really helps in technical analysis.
True, Because of high volatility, Traders can make good profit if they buy asset on proper entry point or else, their position can also get liquidated if market shows high volatility against the direction of trader.
I wish you good luck for the contest.
Thanks for showing me support.
Очень хорошо всё разложили по полочкам!
Thank you, friend!
I'm @steem.history, who is steem witness.
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Your explanation of volatility and its impact on cryptocurrencies is clear and well-articulated. You effectively highlight how volatility can lead to both potential profits and losses and your mention of the fear it instills in some investors adds a human touch to the narrative.
The introduction of the Average True Range (ATR) as a technical indicator is excellent and your step-by-step guide on how to include it in the STEEM/USDT chart using TradingView is informative. The screenshots provide a visual aid making it easy for readers to follow along.
Your analysis of the STEEM/USDT chart for the last month is thorough capturing the bullish and bearish trends. This real-world example helps readers understand how volatility plays out in the crypto market.
Your opinion on the future stability of cryptocurrencies is optimistic and supported by valid points. The mention of increasing popularity potential use cases government regulations and acceptance by merchants all contribute to a compelling argument for future stability.
I appreciate your support sir.
@jasminemary
One fact has become clear that what is in crypto currency is always changing sometimes this market goes up sometimes this market goes down in every respect people get their choice many people have to buy things. There are a lot of people who have to sell hai coin, that's the only reason why this system is working in every way. That's why this system is being run in a special way, different topics are clearly understood by us and your post is really great and appreciated because it shares different topics. Done that your post is awesome keep other activity and comment with other friends.
Thanks brother for stopping by.