Causes of Cryptocurrency Volatility

In my last post, I talked about the Volatility of the Crypto market and I cited an instance of how bitcoin drastically dropped from the rate of $45k to $41k. This drastic change in price or swings affected not only the so-called top coin but also affected other coins which follows its trend. Steem coin is definitely a victim but what causes this Volatility in the market which affects the investments, trades and profits of many. ? Check the writeups below.

Most people may fear the current wants to phase out but that's not true. The unexpected fall in crypto in such a result of many investors dumping several investments like Bitcoin and the likes of them. If you notice as of 2021, bitcoin reached an all-time high with a price of $66k dollars and from the beginning of the previous week that year, the coin starts retesting until it settles at 30K dollars and then during the peak of the bear market, it got to a point where it reached $14k as its lowest.

It is now coming up in preparation for the bull running year. If you look at the Bitcoin chart now which is $41k, bitcoin is still struggling to remain on the bullish trend and this drop has actually triggered most coins to lose out on its value of 4 in price last year. When bitcoin was 14k dollars, a lot of Traders or investors felt the lost out already while some investors out of fear sold out their assets at their own loss.

Still, other investors used that time in buying coins massively at a lower rate so they will be in profit when the coin actually goes up. Another problem is when the Chinese government as I said earlier spoke negatively about cryptocurrency, warning its citizens that they would face severe consequences if anyone were to because carrying out transactions.

This stop by the Chinese brought a huge fall in the world of crypto of which it is still wallowing in that trend. Think of the numbers of investors World by Chinese as the then world power or ruling country. This experience faced by Chinese is also faced by Nigerians because cryptocurrency is considered a fraud and anyone cut trading it when it comes to bank transfers would be penalized.

How? At times a user may want to buy dollars and then send the speculated amount and the narration crypto to that user. Definitely, the users account would be banned because it is not supported that's why it is always advisable to avoid including crypto related words when making cryptocurrency transactions.

In fact, banks won't accept such transactions. These are some of the ways or reason why cryptocurrency ecosystem is experiencing a huge dip in price.

The market is very volatile and may be unable to predict normally. So at some points we may see a retracement in market movement either forward or backwards. Cryptocurrency is majorly a currency that is based on the happenings in the world. If Nigerians or Americans have good and wealthy investors and increase is likely to happen which would affect the stability of the crypto ecosystem.

As other coins including bitcoin reduces, steem token isn't an objection or exception. Whatever happens in the crypto ecosystem as the mother of all coins, its subjects would definitely reduce. We can all see that in 2022/2023, steem price was drastically affected and kept fluctuating in value to the point that it reached 90 Naira but that didn't keep up for long. It didn't maintain that rate.

The picture shows when steem coin was just $0.13. It kept reducing and increasing until it finally accumulated to #300 naira plus. So as it stands, it won't continue with that price as we'll be experiencing bull run year next year. So the drop in price doesn't continue for long. Even if the price is still in a low range, it will change in bits, either forward or backwards.

In conclusion, the market is backed up by Volatility or swings in prices that's why when you enter any trading site, you see prices going up and down. It in a state of constant motion because of dumping of some crypto assets by investors and other factors as well.

Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have