Elon and the MemeCoins.

Market volatility is the trend variations or price fluctuations related to financial assets in a given period of time. Such a concept is not new in the economic area, let alone in the cryptocurrency market.

In the world of cryptocurrencies volatility is very high, which is why it generates a lot of distrust in investors, however, this is a two-sided coin that can affect positively or negatively. For this reason many traders must be attentive to the different factors to multiply the profitability of the investment in the short or medium term.

There are several methods to be alert to market movements and studies such as technical and fundamental analysis, however, I try to comment that there are also volatility factors that is why you should always be aware of the news and important events, one of the most influential tools in this market is the twitter app.
In recent days we have experienced a lot of mobility in cryptocurrencies such as DOGE and Shiba Inu, one of the reasons is due to the purchase of twitter by the entrepreneur elon and also because of the weight it has as a market influencer.

A few hours ago the CEO of Tesla (Elon Musk) made a publication of a simple image with a dog dressed in a T-shirt referring to the twitter logo next to a pumpkin with also the representation of the emblem, although he did not make any comment in a magical way begins to move the market.

In relation to volume of purchases and sales in memes. And although it is very difficult to guarantee that that is the main reason for mobility we realize the increase in volume and top of the best memecoin are related, either as a project or image relationship, all with an increase in the last 24 hours.

Factors affecting cryptocurrency volatility

1.Influencer comments and news.

A person who stands out in a social network or other communication channel and expresses opinions on a specific topic that exert a great influence on many people who know him/her.
These comments may be real or not, but undoubtedly in most events directly affect the market and end up generating large fomos.

2.Important news and events.

If there is an important news within the financial market, prices vary significantly, being even more remarkable in the world of cryptocurrencies, since it is a new investment alternative.

Thus, any event, statement or even rumor can affect the volatility of cryptocurrencies, causing large movements of purchases or sales which, in turn, cause a huge fluctuation in their values.

3.Supply and demand:

Supply and demand is also another factor affecting the volatility of virtual currencies. The greater the demand for buying, the more the price of cryptoassets will increase. Conversely, the more they are sold, the greater the decline in their value.

4.Trends and sentiment

Cryptocurrencies have no intrinsic value, are not regulated by any official body and have no intermediaries, therefore, buying and selling decisions are based, especially, on trends or sentiment.
For example, if the news about a virtual currency is very positive, its demand will grow, as will its price. The same is true the other way around: a bad reputation can cause its value to plummet in a matter of minutes.

5.The herd effect

Investment in cryptocurrencies brings together all types of traders, however, most of the movements come from young people. In this sense, when faced with a sudden change in the price of a virtual currency, those with less experience decide to sell to avoid losses.
This, in turn, causes a feeling of alarm in other investors, generating a “herd effect” and an accelerated fall in market prices.

6.Bitcoin’s dominance

Bitcoin remains the king currency par excellence. Thus, its trends and evolutions can influence the market at a general level.

Final recommendation

I hope this post on the volatility of cryptocurrencies helps you to better understand how they work and remember, virtual currencies are a great investment option, but they should always be managed intelligently, with knowledge, analysis and precision.

The important thing in all this is to know how to swim with the current, not only the technical and fundamental analysis will give us the keys to keep swimming and succeed in this wide sea, so we must be aware of the whales, influencing in addition to the volatile factors mentioned above.

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