Dash has gained much popularity, even over Bitcoin, because it not only values privacy more than the latter, but also allows instant transactions, with much lower fees.
Dash is ideal for traders looking for higher transaction speeds. However, for now, Bitcoin remains the preferred form of cryptocurrency investment for a majority of traders. It has been found that the two digital currencies mostly have a positive correlation. So, instead of users buying 100% Bitcoins, risk can be diversified with some Dash investments.
Diversification will smoothen out fluctuations in your digital currency portfolio and give you better chances at consistent returns. The imperfect correlation between the two will allow marginally lower risk.
Whenever a government imposes a ban or restriction on Bitcoin usage, there is a drastic change in its price. Due to the anonymity associated with such coins, governments are struggling to implement blanket regulations. There are, however, proposals for supervision of exchanges by third parties, which will affect prices too.
Mining Bitcoins and gold seem to have similarities; both are complex and time consuming – not to mention, the associated mining costs. The mining rate determines the supply. The demand, on the other hand, fluctuates over time. As the acceptance of Bitcoin increases, the demand will increase too. Against a limited supply, prices will surge.
Prices are affected by negative and positive publicity. News of thefts and hacking bring down its value, as does news of its association with drugs or money laundering. On the other hand, if a celebrity praises it, its price increases. The general vibe on social media – be it positive or negative – also plays a role in price fluctuations.
Bitcoin remains the most valued cryptocurrency, despite superior altcoins being developed. This is because there is a lot of trust within the community (users and developers). It has been around for longer than all other altcoins. As a trader, it is always wise to stay in touch with discussion forums, communities and chatrooms, to get an idea of the direction of price movements.
The latest advancements in technology influence the price of Bitcoin. If it gets integrated into systems associated with high performance, or gets adopted by major tech brands, its price surges. This is because such developments bring it into the spotlight and spark interest in the cryptocurrency.
The cryptocurrency market is driven by investor psychology. Trading on fundamental analysis is complicated, since there is no economic calendar for cryptos, and no precedent regarding how the markets will react to a piece of news. Factors that drives crypto prices have so far been based on past reactions and price history.
Many experts believe that the crypto market is too young to test indicators on past prices. Sometimes, it is possible to follow the forming of graphical figures (patterns), but the quotes are often unpredictable. Nevertheless, if you are hedging crypto coins against fiat currencies, you should be well-versed in technical indicators.
Psychology is the ideal tool to formulate trading plans.