This season we can observe that cryptocurrencies tend to move up and down even by 15% valuable on a daily basis. Many of these changes of price are known as an unpredictability. But what if… this is completely normal and sudden changes are one of you will of the cryptocurrencies letting you make a good profits? Crypto News
First of all, the cryptocurrencies caused it to be to the mainstream very recently, therefore all this news regarding them and rumours are “hot”. After each statement of government representatives about possibly regulating or banning the cryptocurrency market we observe huge price movements.
Secondly the mother nature of cryptocurrencies is far more like a “store of value” (like gold had recently been in the past) – many investors consider these as backup investment option to stocks, physical resources like gold and fedex (traditional) currencies. The rate of transfer has as well an influence after volatility of the cryptocurrency. With the speediest ones, the transfer takes even just couple of secs (up to a minute), the actual them excellent property for short term trading, if currently there is no good trend on other types of property.
What everyone should carry in mind – that speed goes as well for the lifespan tendencies on crypto currencies. Whilst on regular markets developments might last months or even years – here it takes place within even days or several hours.
This leads us to the next point – although we are speaking about a market value hundreds of billions of US dollars, it is still very small amount in comparison with daily trading volume comparing to traditional marketplace or stocks and options. Therefore an individual investor making 100 million transaction on stock market will not likely cause huge price change, but on scale of crypto currency market this is a significant and visible transaction.
As crypto stock markets are digital assets, they are be subject to technical and software updates of cryptocurrencies features or expanding blockchain collaboration, which will make it more attractive to the actual buyers (like activation of SegWit basically caused value of Bitcoin to be doubled).
These elements combined are definitely the reasons why we are observing such huge price changes in price of cryptocurrencies within few several hours, days, weeks and so forth
But answering the question from the first paragraph – one of the classic rules of trading is to buy cheap, sell high – therefore having short but strong trends everyday (instead of way weaker ones lasting weeks or weeks like on stocks) provides much more chances to make a decent earnings if used properly.