The law of supply and demand is the main factor influencing bitcoin prices. Cryptocurrency is also affected by large transactions in digital wallets, such as those announced by Tesla, and by the context outside the digital world, such as the expectation of regulation of digital assets and the collection of taxes.
The price can also be influenced by financial crises of traditional currencies. As it is not influenced by national governments, bitcoin has become an important financial reserve for adverse moments, a role originally occupied by gold. On these occasions, the scarcity of bitcoins, given their limited-issuance nature, helps to increase the value of the currency.
In addition, the crypto-active quotation is hypersensitive to the news. When investor Cryptocurrency news and new uses for the currency are released, confidence in bitcoin tends to increase and, with it, its price. However, when the news is of technical problems or hacking into brokerages and digital currency systems, the trend is reversed.
Each purchase and sale operation of cryptocurrency carried out is verified by mining members, who are remunerated by transaction blocks. Approximately every four years, the amount paid for mining these blocks is halved, at which time the currency tends to appreciate.
Fame and the recent upward trend have increased interest and buy-in about the cryptocurrency. Therefore, virtual currency is already accepted as a form of payment in several establishments, such as pizzerias and hotels, to credit card companies. Bitcoin is also present in the investor portfolio and in the composition of Investment Funds offered by banks.
Usually, those who invest in bitcoin may want to carry out day trades to make quick gains. This is because in short-term transactions it is possible to obtain a certain predictability of the crypto-active value trend, based on a graphical technical analysis similar to the model adopted in the stock market.
As described by Dow Theory, the stock price moves in bull and bear waves. Thus, a graphical analysis can help the investor to make the decision. The price usually oscillates between support points, that is, the minimum price of the asset, and resistance, a price that the asset rarely reaches.
Thus, when the bitcoin value is close to support, it is an ideal time to buy, as the probability of a fall is small. When the value approaches resistance, the point is suitable for sale, since the asset will hardly exceed that value. If these points break, the tendency is for the asset to have a sudden appreciation (in the case of resistance) or devaluation (in the case of support). Furthermore, keep reading latest crypto news at The Next Bitcoin.