Steemit Crypto Academy Contest / S11W04 - Cryptographic News And Events
 Under this week's topic, we will be examining if news, new developments impacts the price of a cryptocurrency market and if the market can be manipulated in favor of certain class. Hopefully we will learn this and many more. Without further ado, let's swing into the heat of things.
Cryptocurrencies are digital currencies that are not issued by a central bank or backed by a government; therefore, you had wondered if certain monetary policies affect their price. However, since they are being used as entities to store value, certain factors influence their price, factors such as;
Therefore, News and the media inevitably affect the price of cryptocurrencies like every other financial market. As financial markets are impacted by news related to economic policies, currency deviation, changes in government, inflation rate, supply and demand, etc. Likewise, a highly volatile crypto market is affected by news relating to its parameters, such as supply and demand, market cap, regulations, market sentiment, etc. For instance, if the News reports a positive event about a cryptocurrency, this could encourage more people to invest in the said cryptocurrency, hence, increasing the market value of that cryptocurrency and the opposite for bad news. Practically, news about a cryptocurrency has a way of playing with the market sentiment. Hence, certain news is makes up part of Fundamental Analysis. Examples are News related to the rate of adoption, the road map, market cap, and about the cryptocurrency project.
First, let's look at what technical and fundamental analysis are and what differentiates these two analysis methods. With their goals and differences then, we will be able to judge which one among them causes more impact on the price of a crypto asset. Technical (specialized) analysis is a type of analysis that pays reference to trends and patterns corresponding to documented (historical) price movements in crypto. That is to say, it is an analysis method that utilizes past recorded price movements and patterns like chart patterns, support and resistance levels, trend lines, and indicators such as moving averages, traded volume, and Relative Strength Index (RSI), in other to predict future price movements or patterns of the cryptocurrency. Whereas, Fundamental (essential) analysis, is an analytical method used to determine the intrinsic value of a cryptocurrency, I.e. it is an objective measure of the worth of a cryptocurrency. This type of analysis considers various key factors of the cryptocurrency, such as; Blockchain Technology and Uses: The Team and Development: Community and Adoption: The Market and Industry Trends: The Tokenomics and Supply of the Crypto: Therefore, we can say that both types of analyses are important and has an impact on cryptocurrency prices. However, I believe that fundamental analysis which has to do with the basis to which the crypto even exist has more impact on a crypto's price in the long run, whereas Technical analysis can be utilized in trades of short intervals, as its impact can be considered minimal and short. Therefore, solid and prominent fundamentals build trust among investors and traders alike. However, if the fundamentals (I.e. the necessities) of a cryptocurrency are vulnerable and fragile and thrive solely on publicity and promotion without the expertise and genuine ideology, it is destined to crash in the long run.
All these events impact the price of a cryptocurrency, why so? This is because they all affect the factors I've mentioned earlier that affect the price of any cryptocurrency such as market sentiment, and supply and demand. Let's see how that happens; The massive selling of coins increases the market supply, meaning there is a huge quantity in the market space and if this supply is not met by demand, the price of that crypto tends to drop because there is excess supply. This is because the price of any commodity is determined by the Interaction of supply and demand.
This can also be the opposite, that is when an established firm or organization buys a massive chunk of a coin, it tends to build more between seasonal traders which in turn can cause a price increase. For example, we look at Ripple, when a substantial amount of its coin XRP was sold to institutional investors, which increased supply, leading to a decrease in prices as there were no matching demands. This involves coins being permanently expelled from the circulating supply of a cryptocurrency by sending these coins to an address where they can never be retrieved or put back into circulation. In order words, it involves decreasing the supply, thereby increasing demand. Having in mind that the decrease in supply and increase in demand will lead to an increase in price. A practical example in real life is when central banks adjust the portion of money in circulation to alter the purchasing ability. The idea is that if it is rare, it will be appreciated more. Some examples of Cryptocurrencies to have undergone coin burning include Luna, Bitcoin Cash, Stellar, and Shiba Inu  Image Source In November 2021, Luna announced that the coin will be undergoing coin burning following a vote by the community. When it finally underwent the burning, it is said to have recorded the biggest coin burn. As 88.7 million LUNA worth roughly $4.5 billion were burned which in turn helped Luna achieve a new record high in value moving from $50 to $54.95. source Here on Steemit, we take the same actions by setting 25% beneficiary to a null account in the #burnsteem25 initiative by burning 25% of our rewards. New Blockchain tools such as dApps, protocols, or features are set up on a blockchain, it tends to enhance its functionality and accessibility, which in turn can lead to an increase in demand. For example, the splitting of Bitcoin into Bitcoin and Bitcoin Cash brought about an increase in the price of Bitcoin. Another example would be, the feature of DeFi by Ethereum which revolutionize the cryptocurrency world.
There are multiple evidence of news that have affected the prices of cryptocurrencies positively and negatively. Below is a table and demographics showing examples of news and how it affected the price of Bitcoin in the market.
These and more evidence show that News affects the price of a crypto in the crypto market.
Since there are no government regulatory bodies, coupled with the volatility of the crypto market based on traders' market sentiment. I believe the crypto market can be manipulated, but only to some extent. For example, institutional investors in cryptocurrency, who trade in enormous amounts can manipulate the market to their favor. This is possible using the hype and fear mechanism of traders, such that if these big investors inject or withdraw funds from the crypto market, thereby causing fear among the smaller traders. Also, such big investors may publish news as simply as a tweet by hyping the cryptocurrency as we have seen what Elon Musk, the world's richest man did with Bitcoin and Dogecoin.
The image above is an example of such tweets, this tweet alone, moved the average trade volume of Doge/USDT from $1,942 in 30 minutes to $299,330, a jump of over 15,400% increase in trade, talk about influence. As a result, increasing the price of the coin as shown below.
Since we've established the fact that news can affect the price of a cryptocurrency, then such an influential figure can make up news to favor his trade for the time being. I hope with this, I've been able to convince you that the crypto market can be manipulated by investors in the short term.
In conclusion, we've come to learn with evidence that certain news about a cryptocurrency affects its price, and how to use both fundamental and technical analysis to survey the crypto market before investing. We've also seen for a fact institutional traders can impact the market price to their favor too. I love to invite @yakspeace, @ikwal, @miyexi, @ruthjoe, @f2i5 and @suboohi
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It seems like you've provided a detailed overview of the impact of news and developments on the cryptocurrency market, as well as how different factors like supply and demand, technical and fundamental analysis, and events such as coin sales, burning, and blockchain tools affect prices. Your analysis suggests that the crypto market can be influenced by news and market sentiment, with institutional investors and influential figures having the ability to manipulate prices to some extent. It's a comprehensive explanation of how various elements interact within the cryptocurrency ecosystem.
Wow! My entire 1,500+ words essay captured in one paragraph, you must be a genius. Thank you for your supportive remarks. Have a wonderful day.
You've provided an extensive overview of the impact of news and developments on the cryptocurrency market, including factors like supply and demand, technical and fundamental analysis, and events like coin sales, burning, and new tools. You've also discussed how institutional investors and influential figures can influence the market to some extent. Your analysis is comprehensive and detailed, covering various elements within the cryptocurrency ecosystem.
I am glad everyone got to learn something, from the research. Thank you for your valuable time and support, I very much appreciate.
Your research's educational impact is heartening. Grateful for your time and support that contributed to this valuable learning experience.
Coin burning is a process in cryptocurrencies where coins are permanently removed from circulation, boosting demand and potentially increasing prices. Similar to central banks adjusting currency supply. Notable examples: Luna, Bitcoin Cash, Stellar, Shiba Inu. Good luck!
Thank you for your time.
You've tackled a complex topic with clarity and real-world examples that make it easy for someone like me to grasp. Your post is an absolute goldmine of knowledge. I learned so much from your insights, and it's clear that you've done your homework. Good luck in the contest! 😊
I did learn a lot from my researches and just tried my best to present my understanding of the topic as good as I can. The real hero here is you for your time
You are welcome. 😊
Hola amigo 👋
Cómo vas Mos y explicaste en tu post, la persona puede usar la manipulación para beneficio propio, pero lo bueno es que si dedicamos tiempo a aprender sobre criptografia vamos a estar bien entrenados para no caer en la trampa de la manipulación.
Las Noticias como en todo ámbito siempre afectan la situación y más aún en temas de criptos.
Te deseo éxitos en tu participación.
True, News not only affects Crypto market, it affects even commodity, stock and forex markets. Thank you for your time my dear friend.
Hola Sahmie
M eencanto la presentacion y estructura de tu post, como en vez de una sola noticia, agregaste el link de multiples noticias para reafirmar que el mercado puede ser manipulable y probablemente lo seguira siendo por mucho tiempo, pues es como el mundo y la industria funciona.
Te deseo suerte y exitos en este concurso 😊
News will always bring to mankind, be it negative or positive and this also applies to the crypto space. Hence, you and I are also eager to see the price of Steem go up, hence we have taken some of this means above.
We spread news about Steemit by publicizing on our various social medias, and also engaging in the various strategies the Team has brought forward for the growth of Streem such as clubs and coin burning. My dear friend, I really appreciate your value input on my entry. I wish you success in life and in the engagement contest. Thank you
I agree with you strongly that positive news have positive effects on cryptocurrency prices and negative news have negative effects on cryptocurrency prices as well as you have also share some of technical and fundamental analysis that how the impact Crypto world
I wish you good luck to you
It is no hidden fact that, news and media release about any situation report makes the heart of man wander, the crypto market is no different be it positive or negative. I really appreciate your time and support. Thank you
Comparto contigo la que el análisis fundamental tiene un mayor impacto en el precio a largo plazo mientras que el análisis técnico revela la tendencia en un intervalo corto con impacto mínimo y breve.
Gracias por compartir , éxitos y mucha suerte.