Steemit Crypto Academy Contest / S14W2 - Volatility in cryptocurrencies

Cryptocurrency has paved the way for youth to explore multi-money-making strategies in terms of buying and selling assets in the crypto world and profit can only be made if the analysis is made on the market, volatility is also one key area of study that can enhance selling to profit making.

Volatility and How It Affects Crypto

Volatility is a measure of how the price of an asset fluctuates over a given time in the crypto world. In crypto, volatility is measured using a mathematical calculation which is standard deviation, It Predicts the difference between the current price and future price of a given asset. The difference could either come from deviation of the assets or appreciation of the assets. It also predicts the price from the average price. If the volatility rate of an asset is high the asset tends to be very risky to invest in.

Volatility has pros and cons as we all know and its detrimental or beneficial aspects depend on the investor's readiness to take the risk or not. While investing in crypto may bring uncertainty in the mindset of investors due to volatility we should also understand that it could be an opportunity for risk-taking investors to maximize profit. Markets have ups and downs which may temper our minds psychologically but for risk-taking investors, their minds are set to invest.

Let me tell you a brief story that shows how volatility can play with our minds. Recently the Steemit platform has enlightened my knowledge about crypto. So during the introduction of of SBD, I noticed a skyrocketed increase in the price value of SBD when compared to Steems, so I observed and came to the conclusion that since 1 Steem clocked 21 Steem from 18, there might be a possibility for it to increase even higher since I was told that there was a time 1 sbd reached over 40 steems before now. So I decided to sell my steems to get SBD so that if it reached 25 or 30, I sell it back to obtain a higher return on steems, after selling, I noticed after two days the price dropped to 18, that I was so afraid, another thought came into my mind "1sbd may eventually drop back to what it was before which was 15" after few hours of battling with this thoughts I decided to sell it so that I will not be in total loss if it drops to 15, I was afraid so I sold it and after a while 1 SBD skyrocketed to 21steem again. I was more than angry but I couldn't help because I had already sold it.

Technical indicators that measure the market volatility of an asset.

The Bollinger Bands; This indicator consists of three lines: an upper band, a lower band and a moving average. The moving average is usually set at 20 periods, and the two bands are usually set at two standard deviations from the moving average. If the price moves above the upper band, a period of high volatility is expected and there is the possibility of a market increase. If the price moves below the lower band, there is a possibility of market depreciation and a period of low volatility is expected.

Average True range(ATR); These indicators are used to identify trends in the market, The ATR is also commonly used to set stop losses and take profit levels while staking, trading or analyzing market trends. A high or increasing ATR signifies an uptrend while a reducing one stands for a downtrend.

The most commonly used indicator is the RSI which helps to measure the speed and magnitude of price movements. It is often used to identify overbought or oversold conditions which helps traders be able to spot the right time to trade. It has a default setting of 14 periods but it can be adjusted to suit the trader's needs.

How to add the RSI indicator to a Steem/USDT chart

• The first step is to open up your trading platform and find the currency pair Steem/USDT.

• Then, look for the indicators menu and click on it.
• Next, find the RSI indicator and select it.

• Once you are done selecting it, you'll need to set the parameters for the indicator.
• The default settings are usually 14 periods, so you can let the default be if you want to.
• Then, click Apply or OK to add the RSI to your chart.
• Apply you can now study the trends values above 70 means that they are overbought while less than 30 show they are oversold with this analysis could be determined.

Volatility in November

By month	By 4 weeks

^{Indicates stability}

In November the volatility of the Steem/USDT currency pair was very low compared to that of October and as such the market was in a state of equilibrium which means the relative standard index finds it very difficult to move out of the range of 40 and 60. Something must have influenced the fluctuating price and that could be investors in the market according to popular crypto news.

Future of crypto(stability)

It is hard to say that the future of crypto is more stable, the fact that the crypto world still exists even without acceptance from many nations, and the government clearly states the unstable pattern it follows. My suggestion is that crypto could be more stable in the future if it receives acceptance from the government. The market still bears fluctuation, ups and downs (volatility) i.e. The market is still a new set of crypto technology that is quite hard to predict. Everything we discover, and the indicators we use all drive us towards stability so I believe the market will be more stable in the future.

I invite @bossj23, @masudo and @dwings to join in this contest