Steemit Crypto Academy Contest / S11W04 - Cryptographic News And Events

It is another great week in steemit engagement contest. The life of a crypto trader is affected by so many things. Most at times, picking a trade or choosing an asset pair to trade is usually difficult. There are several factors that influence the market of which he does not have control over.

This week's topic has just reminded of something that happened to me when I was small. Since I and my older sister were trying to make money to care for our needs then, we decided to go harvest water leaf close to the public toilet. No one owns it and our young mind then was that we could just bring it to the market and sale. But because it was a small village, those who saw us raised an alarm while we were already making sales in the market. She told people that the water leaf was harvested from the public toilet side and guess what?

Those who already bought dumped it for us and others refused to buy. That news alone was a very bad market for us and we had no option than to throw the water leaf away.

Using the contest tips, I am going to highlight how news affects the crypto market.

Can news affect cryptocurrency prices?

For a certainty, news does affect crypto currency prices. This is peculiar to financial markets. All financial markets are affected by news relating to stocks or instruments traded there. Similarly, the crypto market is also affected. News relating to the space grossly affects its prices either by skyrocketing the prices or leading to dumping of the aforementioned crypto.

These news are part of fundamental analysis. We have been witnesses of the effects of news on crypto currency. We all know that whenever Elon Musk tweets, the crypto prices will be affected. His tweets about Doge coin, led to a sharp increase in the price of Doge coin. More recently, we know of XRP winning the lawsuit by SEC, this lead to a serious movement of crypto prices in the market.

So definitely, News does affect crypto prices.

Between technical and Fundamental analysis, which affects the price of an asset most?

I will say that technical analysis affects the price of assets more than fundamental analysis. I will rate them 75:25 which is 75% for technical analysis and 25% for fundamental analysis.

Though, both technical analysis and fundamental analysis are very important in the price of an asset. Technical analysis deals with historical figures and technicalities of the assets. Most times using this, you will find out that history repeats itself. Additionally, technical analysis is a function of the forces of demand and supply which is even at the root of changes in the prices of assets

So using this, the analyzer, spots the demand and supply zone, using it to determine his exit and entry zones.

On the other hand, news happens at the spur of the moment. It can lead to spontaneous increase in asset price within the moment and will later go back to its trend direction.
Sometimes too, it directly changes the trend or direction of the asset price. This happens less frequently.

Events such as Selling of coins massively, The burning of coins, creating new tools for a blockchain, among others. Does it affect the price of cryptocurrencies? If yes then explain and give us examples.

Massive Selling of coins

There is a principle of economics that affects every market, be it financial, stocks or any other type of market. It states that * when there is much supply in the market, demand reduces and prices crash and vice versa*. This implies that when a holder is selling off a coin massively, the price of the crypto currency crashes due to excess supply. We saw that in the case of Luna coin, where the holders sold off their holdings to book massive profit.

Burning of coins

This is the medium through which coins are reduced and totally removed from circulation. Usually, a wallet address is created which cannot be used for any other transactions except for receiving coins. Ordinarily the keys to the wallet are destroyed or the wallet is outside the coins network so that the coin cannot be moved or returned to circulation.
So once more, Applying the principles of supply demand, the lesser the supply, the higher the demand and the higher the price.

A case in point is what we have on the steem network, The #burnsteem25 initiative, where a wallet known as @null is mapped out as a burn wallet and users are urged to set at least 25% beneficiary to this wallet to burn and reduce the amount of steem circulation.

So burning of coins affects the price of crypto currency positively.

Creating new tools for a Blockchain

Creating a new tool for a Blockchain is a development stride for the project. It shows that the project has a future and it is a going concern. It also proves that the project has a vision and a mission which it strives to achieve. It is surely a positive development for the Blockchain. So this affects the crypto currency price positively. It leads to an increase in the price of crypto currency.

An example is the launching of Shibbarium by Shiba in its Blockchain. This project will enhance the entire shib protocol. We can see its effect on the price of the crypto currency shiba this August.

Investigate about a news that affected the cryptocurrency market.

An example of a news affecting crypto market is that of XRP and SEC lawsuit. In the course of this lawsuit, several News emanating from them have affected the price of crypto currencies.

Few months ago, speculations on XRP winning the lawsuit led to a sharp price movement of XRP and some other tokens.

This is seen in the screenshot below.

We can see the surge in price caused by that news alone. Within a space of 8 days the price jumped from $0.34 to $0.58. that was truly massive. This was also the case with most coins then.

XRP is among the coins whose price movement affects the entire price movement of the crypto market.

Can the crypto market be manipulated? Give your understanding on this.

Having monitored the market for some time, I can say with confidence that the market can easily be manipulated.

This can be done when institutional investors inject funds into the market, the market easily moves in their direction. That is clear manipulation. If you are trading against them, you are sure to lose your funds

I have also mentioned about the effect of news, this can manipulate the market easily. There are groups of people that cause FUD, which causes holders to dump their holdings leading to crash in crypto prices.

In Twitter (now known as X), there is a user that tweets like Elon musks. Whenever he says buy for BTC, it means that it is going to dump and when he says sell, then BTC is going to pump.

So the crypto market can easily be manipulated by investors with huge funds, who desires to buy a particular coin at a very reduced price.

Conclusion

It has been wonderful writing this contest. I have been able to show from this contest that several factors affect the crypto currency price. Knowing this will give us an edge while trading, so as to be more careful once we hear or see any crypto news, determine the effect on the market so as not to lose our hard earned funds.

What's your own view @casv @uzma4882 and @drhira. Please let me know via your entry in this contest

Good luck to you all!