The value of cryptocurrency is determined by supply and demand, just like anything else people want. If demand increases faster than supply, the price rises. For example, if there is a drought, the price of grain and agricultural products increases if demand does not change. When prices have risen over the course of the day, the candle will be green.
The thin line at the bottom shows the lowest price recorded for the crypto asset during the trading session, while the thin line at the top shows the highest price that was reached. The bottom of the thicker section shows how much the asset was trading when the markets opened, while the top of that rectangle illustrates the price at close. If the price of a fiat currency falls, then the price of Bitcoin would rise relative to that currency. This is because you'll be able to get more of that currency with your Bitcoins.
This phenomenon can be observed today, as the FED, the ECB and other central banks have been printing more and more money and keeping interest rates artificially low. As can be seen in the figure above, in general, the trends of each currency seem to be correlated. However, it is well known that calculating correlations directly on non-stationary time series data can give biased correlation values. Therefore, the daily percentage change is used to assess the correlation.
Below are the correlations of the price change of the top 20 currencies by market capitalization. Moya refers to the increase in the stock market in recent days and the general calm of macroeconomic fears among investors. Often, an increase in stocks will also lift cryptocurrencies. He says investors are starting to feel more optimistic about the economy, inflation and rising interest rates, which is a positive sign for risky assets.
In general, the more confident investors have about the stock market and the broader macroeconomic environment, the more risk they are willing to take. Developments such as these are a reminder that cryptocurrency is still a relatively new technology whose full effects on the global economy are not yet clear. Cryptocurrency prices are volatile and unforeseen events can cause prices to fall. If the price of bitcoin stabilizes over the next two weeks, the protracted cryptocurrency bear market, also known as crypto winter, could end as quickly as it began.
Cryptocurrency prices are rising as investors begin to feel more bullish towards the cryptocurrency market, thanks in part to the recent rally in stock markets in the U.S. UU. Reconsider what you might be more comfortable with in the future, such as allocating less to cryptocurrencies in the future or diversifying through crypto-related stocks and blockchain funds instead of buying cryptocurrency outright (although you should still expect volatility when cryptocurrency markets fluctuate). Several high-profile cryptocurrency companies, notably hedge fund Three Arrows Capital and crypto lender Celsius, have filed for bankruptcy.
That's according to Edward Moya, a senior market analyst at brokerage firm Oanda, who says that “Wall Street is enjoying a risk-positive mood that is a good news for cryptocurrencies. Therefore, it's a good idea to stay connected to as much cryptocurrency news as possible to ensure you get the broader view.
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