How Can Fluctuations in Cryptocurrency Be Predicted? Can The Cryptocurrency Market Be Controlled?

Bitcoin is the most popular cryptocurrency in the world right now. Cryptocurrency allows users to send and receive digital currency over the Internet securely and anonymously. The Bitcoin network has attracted investors, entrepreneurs, and corporations in recent years by facilitating service and product transactions. Furthermore, Bitcoin has established itself as the most popular decentralized cryptocurrency.

The only fear that has hunched this complete system on a raised remark, is the risky and speculative nature. The fluctuations that run in the market are very extreme and can either tripled the investment or cut it in half. This aspect of the digital currency creates a cessation for many people to enter the market and understand the whole mechanism.

Though the crypto market runs on a very speculative instance, a single tweet or a major reaction by a stakeholder in the market can create a lot of humdrum and lead to a drop in the price of crypto coins. The big traders, hedge fund investors play a very big role in market manipulation and control.

Precautions on a general stance can be taken and wise investment can be made, therefore. Instead of diving in blindly, a basic study of the company is prominent and can help control the returns.

ONLINE COMMUNITIES RESPONSE

Online communities where the big investors and major stakeholders are participative, should be followed and analyzed. Especially the companies of which the cryptocurrency has been bought should be studied in detail and continuously followed. A major or minor change in their policy or the way they operate in the crypto market can have a huge stake in the price manipulation. If any major news has been made public in regards to trading, so it’s better to take a wise step immediately.

For example, The Crypto market was hit by a major stake when a tweet was made by Elon Musk in regard that they will not be accepting payment in bitcoin for their electronic vehicle payments or when they announced that crypto is causing harm to the environment.

PREVIOUS MARKET DATA

The pattern of the movement of the coin, needs to be analyzed and studied very carefully. Before investing, study the structure and invest in a good portfolio. If the price of the coin has been rising for a long time with very few dips in between, then it is considered to be more of a stable option and the fluctuations will be less. So predicting the fluctuation in the case of a structured rising portfolio is very easy.

VOLUME BEING PURCHASED

The price of cryptocurrency will rise if more people are buying it and the share of the coin is increasing. It is assumed that the price of the coin will rise in the future. So, the fluctuation will take a high toll. It is advisable to purchase the cryptocurrency. Even-if the near market does not seem to be favorable, it can still be sold on a profit value equation.

GARCH Model

Investors can also heed statistical models to get a more enhancive view of the crypto market volatility. One of the most practiced methods is the GARCH method. GARCH is a statistical model that can be used to analyze several different types of financial data, for instance, macroeconomic data. Financial institutions typically use this model to estimate the volatility of returns for stocks, bonds, and market indices. The method very statistically considers data and base the result on the analytics deduced.

The volatility of the crypto market can not be controlled. The prime reason for not being a controlled market is that the crypto market is not backed by any sovereign or reserve system, making it a free currency, based on a completely digital setup.