Long and Short Term Cryptocurrency Volatility Components

Introduction

Good everyone everyone, I wish to talk about the Long and short-term cryptocurrency volatility components, volatility of cryptocurrencies are influenced by so many factors which brings to the existence of both long-term and short-term components. Stay tuned as I quickly throw more light on this crypto related topic.

Long-Term Volatility Components

Innovation and development: The long-term volatility is always affected by ongoing innovations and developments as well as improvements in the broader crypto ecosystem and the blockchain technology. These processes are always occuring that's why is classified under a long-term volatility component.

Market adoption: Through global shifts long-term volatility can steem in how widely a cryptocurrency is being accepted for investments or real-world use cases.

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Fundamental factors: These factors completely includes the technology's rate of adoption, security, upgrades, scalability, change in protocols and overll utility as well as demand for the cryptocurrencies.

Macro-Economic factors: The volatility of cryptocurrencies and long-term stability can be influenced by inflation rates, monetary policies, global economic conditions and geographical events as these things are steady occurrence which makes life easier.

Short-Term Volatility Components

Regulatory news: Changes or announcements in regulations related to cryptocurrencies can cause immediate market reactions so this category is definitely classified under short-term volatility components.

Volume of trading: Short-term fluctuations can be triggered through sudden changes in trading volume. It really affects it alot. Most times short-term fluctuations occurs alot while sometimes the case is vice-versa.

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Technical indicators: Moving averages, short-term price support/resistance levels are factors under technical factors which can highly affect short-term volatility.

Market Sentiment: Social media trends, news and public perception are popularly known to rapidly influence short-term price movements. Everyday we get different news or updates as constant news is never possible.
cryptocurrency markets and make informed decisions.

Conclusion

Is very important for investors and traders dealing with cryptocurrencies to fully understand the short-term and long-term volatility components so that they can be able to fully grasp the complex nature of cryptocurrency markets and also produce informed decisions when necessary. Thanks for reading and am sure you really learnt something new in this cryptocurrency related post.

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.