Analysis of News Context for the Crypto Market
The crypto market is strongly dependent on the news. Traders — both bulls and bears that are basically in a real “war” — benefit from it. The “warfare” is also joined in by manipulators and conmen who try to make a stir and make money from random actions by traders.
Implications of the news context
The price of conventional assets, such as company shares, is based on capitalization, financial statements, and observable factors available for analysis. However, it’s still unclear what the cryptocurrency market responds to as this market is very young, and a lot of factors remain to be identified and described.
At the same time, most traders acknowledge that news have a strong impact on the crypto market. Both bulls and bears leverage the news context to shift the cryptocurrency price in their favor. They arrange publications with a negative or positive market assessment or actively support the published articles in the mass media. The conventional asset market would view this behavior as a manipulation attempt that would possibly be punishable, but the cryptocurrency market is still underregulated.
Conmen also contribute to the news context, but more often they try to make a stir around a lesser known coin that is allegedly unique and about to “score a big win”, with its price rising and all those who have been able to buy it making profit. This is the so-called “pump hyping”. The new “promising” coin scores no “big wins” while the investors pay into the pockets of the conmen with real-value coins.
How news should be analyzed
To analyze the news context, select a few reliable sources that have been publishing news regularly, seamlessly and for a long time, at least a few years. There are web-sites that aggregate news from hundreds of sources, but you would have to prioritize them on your own.
A very useful source of news is the social networks and resources for experts.
However reliable a source is, you have to check each piece of news against multiple sources, especially if it’s hyped-up news. No editions or specialized resources, not even the most reliable ones, are insured against fake news.
Below is a list of information types that could affect the price of cryptocurrencies:
– Any changes in legislation related to cryptocurrencies, ICO and blockchain. News about the coin being listed by a well-known crypto exchange.
– News about the coin partnering with a big player at the conventional market, such as a bank or a big corporation in the real sector.
News about a top-class specialist from the real sector joining the team.
– Significant progress in developing the coin: release of new important software, a new stage in the development process, etc.
However, experience has proven that it’s impossible to precisely tell that a particular piece of news is going to affect the market and how it’s going to affect it. You just need to remain vigilant.