Understanding Crypto Market: Can We Predict the Rise and the Fall of Crypto Price?
In 2021, when Bitcoin was $68,000, people started predicting that it will soon become $100,000. A few weeks later, when Bitcoin started falling down, people started saying Bitcoin will become $20,000 or even $10,000.
Predicting Bitcoin and Ethereum Price
When I knew about Bitcoin in 2015, it was $400. Since everyone was taking highly of this first digital currency, I choose to receive my payment from a client back in 2016 in the form of bitcoin. I received almost a quarter of 1 bitcoin. Between 2016 and 2017, I used bitcoin to receive payment so many times that I had 1 bitcoin in 2017 when it was $900. Since I did not consider bitcoin as an investment, I withdrew my bitcoin every time I received bitcoin.
I remember Ethereum when it was just $12. Just about two years ago, Ethereum was $220. In August 2020, it rose to $400. In November, the price soared to $600. By the end of 2020, Ethereum was $720. By the end of January 2021, Ethereum was $1300. As of writing this, Ethereum is $2623, however just a week ago, it was almost $3000. If you look at the price history of Ethereum, you will see it has always gone up. It has of course gone down briefly, but ultimately the price has always increased. I do not think Ethereum will again go back to $220 as it was two years ago. It may go down by $100-$200, or even $500 but that will be for a brief time only. I see great possibilities for Ethereum.
If I had immediately invested in bitcoin and ethereum when I knew about these cryptocurrencies for the first time, I would have made a lot of money. I can still invest, but the price is so high that I need a lot of money.
Crypto Whales, Market Manipulation, and Meme Coins
Meme coins are in limelight, news of whales investing in different coins are heard frequently and there is a lot of market manipulation going around.
It is no secret that meme coins like Doge, Floki Inu, Shiba Inu price is driven by whales. Whales bought a lot of shib tokens. The general rule of thumb is when people start buying crypto coins or crypto tokens, there will be a demand in the market, and when there is demand, the value of the coin will start going up. Once the whales stop buying more, the price starts falling, as there is no demand for the tokens. That's how meme coins work and that’s how whales manipulate the market.
Understanding Crypto Market
The current crypto market has a market cap of just about 3 trillion USD, of which Bitcoin has a market cap of just about 1.6 trillion, and the remaining 1.4 trillion market cap is held by altcoins. The nearest competitor of Bitcoin in terms of market cap is Ethereum and ETH has a market cap of about 600 billion. Now you can just analyze, why no other coins can grow as big as Bitcoin and why Bitcoin remains the leading cryptocurrency forever, even though there are a lot of other coins that are better than Bitcoin in terms of transaction cost and speed.
The Rise of So-Called Crypto Investors and Experts
Forums are good places to learn. But is the information provided on the forum is authentic? You can never trust a user-generated content site because you don’t know the expertise of the poster.
I have noticed some interesting things happening on the paid to post sites. There are a lot of “experts” on many topics. (Listen to my sarcasm)
A person visits a crypto exchange platform and learns about the price of various currencies and post on forums as if he is a crypto expert. A person receives $5-$10 from paid to post sites in cryptocurrency and presents himself that he is a crypto investor.
Knowing about the price of cryptocurrency does not make you crypto expert, investing $5-$10 in cryptos does not make you crypto investor.
These people do not know how blockchain operates, yet they present themselves as crypto investor and expert.
First published on Trendri, in author's name
