With Bitcoin’s value as high as it is now, a lot of people are trying to get into the cryptocurrency market. What they might not realize is that price fluctuations in the cryptocurrency market are primarily influenced by outside factors, such as media coverage, sentiment, and overall demand. This makes it difficult to predict what will happen with the prices of cryptocurrencies because they depend on so many external factors.

This article will explore some of these outside factors and how they affect the price to provide more clarity on where a particular coin might go from here. If you’re interested in learning about how Bitcoin’s value fluctuates, then you should read this article for clues about what might happen next for your crypto investments.

The role of media and public opinion

There’s no doubt about it: the media and public opinion play a huge role in determining crypto prices. However, there are a lot of misinformed opinions out there because people tend to only read things from one source.

This is true with fiat currencies as well. If you read a news article talking about how much someone hates the Euro or how bad the US dollar is, then you probably won’t trust that person’s opinion if they talk about how great the Euro is or how amazing the USD is. It’s rare to find someone who can talk about different currencies in an intelligent and informed way.

The role of government regulation

A lot of people assume that government regulation has a big role in the value of cryptocurrencies. After all, one of the main things that made Bitcoin popular was the fact that it wasn’t regulated by a central bank, which is why it became such an attractive investment for many people at first.

However, governments wouldn’t be so interested in cryptocurrency if they didn’t see a way to benefit from it. In fact, some governments are already looking into ways they can benefit from cryptocurrency as an alternative method to handle taxes or make purchases online.

The impact of economic indicators

Cryptocurrency prices are meant to be more like traditional stocks and bonds, which is why they often track a lot of economic factors, such as inflation rates, interest rate changes, and exchange rates. By tracking these various economic indicators, cryptocurrency traders can get a sense of what might be happening in the economy, says Investopedia.

As an example, you may want to jump on Bitcoin if the stock market is going down because it means that people are scared about future economic conditions. On the other hand, if stocks are climbing, then it doesn’t mean that people are happy with the state of their economy. Many investors would actually look at this as a red flag since it represents unknowns in our economy that could potentially impact future gains.

The future of cryptocurrency prices

All of these factors can help you decide whether the price of Bitcoin or another cryptocurrency might go up or down in the future. Although there are a lot of reasons why one cryptocurrency can go up while another goes down, if you want to make better investing decisions, then you should look at factors that affect more than one cryptocurrency.

Overall, these factors are important because they tell you what’s happening in the economy. If you understand how these outside influences affect your chosen coin, then it will be easier to make better trading decisions and spot trends sooner rather than later.