Matuto Patungkol sa Crypto kasama ang Velas Part 3 — What Drives Cryptocurrency Price

3 min readNov 27, 2020

Disclaimer: I am not a financial advisor and this content is made for entertainment purposes only. Do your own research before entering volatile cryptocurrency market.

Greetings Velonians!

We are here for another part of “Matuto patungkol sa Crypto kasama ang Velas”. With the recent run up of most Top coins in coinmarketcap, we will talk about what usually drives upside of Cryptocurrency prices.

If you are new to this channel, don’t forget to follow our Medium Page to stay updated to the latest news and happenings about Velas and our Telegram Group to get in touch to our administrators.

Also catch our previous “Matuto Patungkol sa Crypto kasama ang Velas” content:
https://velasph.medium.com/matuto-patungkol-sa-crypto-kasama-ang-velas-part-2-b7df27d38385

What Drives Cryptocurrency Price?

Insane gains are seen recently in the Cryptocurrency markets which increase the whole marketcap by almost 30%. Some of you might be curious what usually drives cryptocurrency price, some says it’s speculation, could be determined by Technical Analysis or Fundamentals, all is true but not written in stone and could change any second at any time.

We listed here is some of the reasons what drives cryptocurrency price that you can check to determine the trend of the market or forecast your favorite coin.

Supply and Demand

Cryptocurrency has a predetermined supply after creation thus creating a limited supply. As cryptocurrency ages and adoption increase, the demand for most cryptocurrencies increase but the supply remains the same. As a result, the more people asking for Cryptocurrency could exponentially increase it’s price because the supply is scarce and holders of those Cryptocurrency is the key determinant of it’s price.

Pump and Dump

Noting that the supply is fixed, the prices are subject to manipulation.

For example: There is a fixed 1 Million VLX, one person bought 100k VLX. This scenario can increase the price of VLX. On the other hand, selling all of those 100k VLX in one sell order will trigger pending stop orders which can bring the price lower.

Buying a huge portion of the supply is pump and selling a huge portion of the supply is dump.

Exchange Listing/Liquidity

Considering the coin Supply and Demand, a pre-determinant of the cryptocurrency’s value is the exchange it is listed and the liquidity it provides for the users. If the coin is actively traded, it is more likely to hit buy and sell orders and is considered to have a healthy market movement.

The more popular and better the exchange, the more it could attract buyers and sellers to trade the Coin. That is why exchanges are vital to the price of Cryptocurrency.

Legal

There are restrictions in some countries (China for example) that didn’t allow cryptocurrency operations. With this alone can restrict users that declines the demand for cryptocurrency and vice versa.

Restrictions could help for the price decline and Regulation could push adoption that helps price increase.

Innovation

This is where the demand comes from. Using the blockchain technology to have a better financial institution that is free from any corruption.

The more Cryptocurrency can improve our daily lives, the more users will use it thus creates a ripple effect for others to use as well. Like Velas, it is ought to create a blockchain ecosystem and a variety of products to rewards it’s users, an optimal network for scalable usage and an interoperable network that could serve any users from any class without compromising their comfort.

Conclusion

Cryptocurrency is volatile and price movement is subject to many factors in this relatively new financial market. Nothing is sure but this technology is now reaching institutions that is a good indication for upside trend. With the recent Bitcoin Pump serves as a reminder that cryptocurrency is not dead and adoption is inevitable.

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