What to Look for in Crypto News When Predicting Crypto Prices
The cryptocurrency world has been gathering speed at a breathtaking pace. The total market cap pushed past $2 trillion on the 5th of April, having doubled in worth in just about 2 months! Such huge value gains attract new investors by the masses, aiming for a slice of the pie.
So what better way to assure one’s invested sum grows than knowing how to predict prices? Crypto news sites are buzzing with every tit-bit of crypto news out there. There are, however, a few things to look out for that could make even a novice pretty accurate at predicting prices.
Technical Terms to Look Out for
These are the first set of things anyone wishing to predict a crypto price movement should be on the lookout for. They tend to explain the general movements of crypto prices as observed by analysts. The terms to look out for include;
Movements of the Resistance and the Support Zone
The Resistance zones are the upper limits of a crypto’s predicted price movements during a trade period. Price gains are expected to temporarily pause here due to sellers increasingly wishing to sell at this higher price. If cleared, the crypto shows the potential for a sustained significant price upswing.
If on analysis, one can see a trend of a crypto’s price repeatedly breaking the resistance barrier, it can establish that the price is making strong gains. One could predict expected price gains in the short term with some levels of confidence. On the other hand, the support zone earmarks the lower limit of a crypto’s price during a certain trading period.
Drops in prices are expected to halt at this point since new buyers are purchasing the crypto at a low price temporarily. If prices dip below this point, the possibility of returning to the current position during the same trading period is quite slim.
When crypto news sites keep showing a dip in crypto prices below their support zone during every trade period, there’s a likelihood of the next prices being lower. Such predictions, however, work for short-term periods.
The MACD Movements
The MACD, an abbreviation for the moving average convergence divergence, is a perfect indicator of trading trend analysis. The MACD helps indicate if the current short-term movements in prices are in tandem with the general long-term trajectory.
The movements of the MACD may either indicate a bullish or bearish market condition. A bullish market implies a sustained upward movement in price that’s expected to persist during the trade. A bearish market means prices are dipping and may be sustained for a while.
For anyone wishing to predict cryptocurrency prices, looking at the MACD movements could go a long way. Either it could sustain a bullish or bearish market condition for a while unless an unpredicted market interference occurs.
Other Posts to Look Out for
Unlike the technical terms, this set of posts do not explain a profound market analysis of the current price movements. What they do is explain certain variables with the potential to influence price movements. Such terms include but aren’t limited to;
Whale Investors’ Actions
Whales are huge investors in the crypto world. Either being Ultra High Net Worth Individuals (UHNWI) or institutions, they move huge sums in and out of any blockchain they’re involved in. Thanks to their deep pockets, whales can reshape the price trajectory of most cryptos they’re interested in.
Many crypto news sites are, in turn, always keeping tabs on them, analyzing every statement they make regarding investments or about crypto. Anyone can, in effect, predict the price of crypto with a lot of accuracy if they base it on the reactions of a whale. If the whales are bullish on a cryptocurrency and hint at increasing their investment portfolio, they can predict prices to rise with a high probability. The reverse is also true.
Major Government Actions
The governments of major economies have huge price-setting abilities for cryptocurrencies. Their policy instruments affect prices by influencing investor actions indirectly or directly.
Governments may start law proceedings on a specific crypto’s host blockchain or founders and heavily affect its price by instilling uncertainty on buyers. A good illustration happened in the US. The United States Securities and Exchange Commission (SEC) filed a class action against Ripple’s entire business model.
The consequence of the sue was a collapse of Ripple’s XRP prices, followed by widespread delisting on crypto exchanges around the world.
It shows that looking upon government actions of major economies with regards to cryptos could be a good indicator of its price movements.
Host Blockchain Activities
Just like the whales and the governments, host blockchain activities or inactivities can influence prices. Looking out for them could give a clear picture of where prices are headed. Such scenarios include;
- Major blockchain upgrades. They serve to strengthen investor confidence, predictably boosting prices, such as the Ethereum 2.0 upgrade.
- Blockchain-specific events. Events like the Bitcoin-halving event, specific to the Bitcoin blockchain, result in huge value gains hence predictable.
- Security breach handling. How blockchain experts handle a breach determines if the breach will happen again soon. Sub-par handling hurts investor confidence, resulting in price drops as they shy away in turn.
Cryptocurrencies are yet to reach their true potentials, posing a very sound investment asset. There are, however, several altcoins that fizzle out fast and cost investors a fortune. Knowing how to predict price movements may help reduce the possibilities of losses by a huge margin.
It is, however, worth noting that it can’t predict market movements with certainty. Even the most experienced analysts still get caught unawares by market swings. In addition to predicting prices from crypto news posts, it is wise for one to exercise caution still and stick to their financial plans.