Want to earn for crypto trading? If yes, then you need to know about the importance of forecast. There are various factors that make the coin valuable, and calculating the future price prediction based on this factor is known as a crypto price forecast.
Before you invest in the crypto world, you need to know about various factors that make a coin valuable. Although different forecasts are available to help traders but one should never trusts them blindly; instead, they should do some research. This is because Cryptocurrency and other financial markets are almost impossible to predict; so, there is a risk of losing money.
What is Cryptocurrency?
Cryptocurrency is a digital currency created to replace fiat money (currency issued by the government). This currency runs on the Blockchain technology, which makes it almost impossible to hack. Also, it keeps the identity anonymous.
These days, many industries in different parts of the world have started accepting payments in Cryptocurrency. Although not every industry will accept it in the coming years, we can find most of them accepting it. People can make money by selling and buying these currencies, which is also known as crypto trading.
How does crypto coin gain value?
The value of Cryptocurrency usually depends on its demand and supply (simple concept of economics). The supply of such coins depends on how many coins are mined every day by miners and how many sellers are willing to sell their coins.
However, the demand for the coin depends on various factors. The demand for coins directly depends on their uses. In simple words, whether its monetary system works well or not. Usually, those most demanding coins offer fast transactional and low fees. Also, if businesses start accepting a particular coin, its value will increase.
The price of Cryptocurrency also depends on the Cryptocurrency price forecast. These forecasts are mainly based on the above-discussed factors. However, these predictions can also be made based on hidden market factors.
What factors affect the coin price?
Demand and supply – When the demand for the coin exceeds its supply, the price of the coin goes up. On the other hand, when supply increases, the value of coin decreases.
Random buy and sell – Usually, most beginners start buying and selling coins without knowledge and skills. By doing this, they are unintentionally affecting the price of the coin. This is because when they buy the stock, its demand increase, and when it sells, its supply increase.
Media coverage – Media can affect the price of Cryptocurrency. When a coin comes under media coverage, its value increases as it gains publicity.
Crypto exchanges – if the Cryptocurrency is listed on more exchanges, its value will increase. This is because if it is available on more exchanges, those more people will buy it.
If you want to become a profitable crypto trader, then only buy the coins below their value because they will surely go to their real value, giving you significant profits. However, if you want a free crypto price forecast, consider CryptoChatty, here, you all get live chat rooms where one can discuss crypto with other traders.