“Bitcoin is known as a volatile asset and there are numerous influencers that account for this volatility in its price. Bitcoin is relatively a new technology and there is a lot of lack of knowledge about it around the globe that makes it vulnerable to manipulation and rumour fed price volatility. Here we will make an effort to identify these negative influences on Bitcoin Price.”
The Price Fluctuation of Bitcoin
The flash crash of May 2021 is evidence of how bad it can be for an investor of Bitcoin when Bitcoin’s price starts falling. It can free fall and wipe out about 50% of an investor’s portfolio in minutes. There are various price influencers in the crypto markets that can quickly make the price of Bitcoin to fall sharply and a list of these top influencers have been made here in order to provide you with the knowledge regarding; from whom to stay away in the crypto market.
The Top Negative Influencers
The Media FUD
The media is one of the major influencers of the crypto markets and Bitcoin in particular. The Media has been seen regularly creating FUD (Fear, Uncertainty, Doubt) in the crypto sphere by publishing negative news that directly affects the price of Bitcoin in a negative manner.
Large Amount of Dumps
Large investors in Bitcoin are an extremely dangerous species of investors as their buy and sell orders can move the market completely in one direction. If a large investor dumps or sells a huge quantity of his Bitcoin Bag, it creates a huge supply in the market thus dropping the price of Bitcoin very quickly wiping out money of the retail investors.
Government Bans and Regulations
Countries like China are completely against Bitcoin and have banned the use and mining of Bitcoin completely in the country. Such strict regulations or bans result in huge price decline in the market. Various countries around the world including the US are framing regulations for the crypto industry and any such bad news or any strict regulation negatively influences the price of Bitcoin.
Whale Manipulation and Lack of Experience among Traders
There are a lot of novice traders in the crypto markets who do not have the experience to understand the Whale manipulations and always invest according to the FUD and FOMO in the market. The Whales take the advantage of these novice traders and manipulate the market by putting a fake order of selling huge amounts of Bitcoin on multiple exchanges thus creating fear in the market and dumping the price down. This creates a wave of panic selling among the retail investors leading to further decrease in price of Bitcoin. The whales then remove the sell order and buy at the lower prices
Disclaimer: The article is meant for the educational purpose only and in no way it should be considered as financial advice. Own research on the topic is advisable.
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