BTC price moved by emotion and mood! - page 3.

Denker

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Quote from: CryptoRaymond on May 24, 2018, 09:28:43 AM

A study by finance professor Daniele Bianchi says that the prices of cryptocurrencies are influenced by the mood, hype and emotions of investors mostly rather than economic factors. It really sounds horrible. But I think it is partially true. Because if you see the number of people engagement with bitcoin, you will see that a large number of people came to this market after the vibe of BTC rising. And they entered here without gathering proper knowledge.

What do you think about this? What would be its effect???

In general, all markets move due to emotions. What differs is the strength of these emotions.
And yes I would agree that the crypto space is very much driven by feelings, hype and doom.
Many market participants are completely new and never have traded or invested in any asset before.
So the market is packed with noobs, people who can easily be played with by the real experienced guys.
Just have a look at those twitter accounts following these 'Crypto OGs' or all those telegram chat groups. Noobs everywhere, who believe they can get rich over night and barely understand the basics of trading or investing at all. And just one simple fabricated news is enough to make people dump or fomo in. Cheesy

The Sceptical Chymist

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Quote from: 1Referee on May 24, 2018, 10:59:59 AM

You don't have to be a professor to figure that out, it's just common sense because it applies to all emerging markets; they are speculative by nature, and thus an emotional roller coaster, and thus volatile.

True, but "emerging markets" usually refers to businesses within those markets, and thus when you use that phrase, it probably refers to stock markets. As I've said quite a few times before, stocks are very, very different than crypto. They do have some similarities, but the bottom line is that you can analyze stocks much easier than you can a cryptocurrency. With stocks, there's a business that's behind a given stock that has earnings, management, perhaps a dividend, and businesses are affected by general economic conditions as well.

What does bitcoin have? News and investor sentiment. That's it. Bitcoin doesn't have earnings and doesn't pay a dividend--what its price boils down to is simply supply and demand, and the supply is always known. So it's basically demand only, and that demand comes from rumors, news, and investor emotion. If anyone can think of any other factors, I'd love to hear them, because those are the only ones I can see.

1Referee

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You don't have to be a professor to figure that out, it's just common sense because it applies to all emerging markets; they are speculative by nature, and thus an emotional roller coaster, and thus volatile.

I have said it before, large players play with people mentally to steer them into a certain direction, and that has been the case since the very beginning. This market is so small (still so today) that deep pockets can have the best time of their life in this market. If you add that there are now alternative ways (futures, options, etc) that will allow you to not only benefit once from manipulating the market, but two or three times simultaneously, manipulation suddenly becomes a whole lot more luctrative.

Holders don't have to deal with this volatility. If the market tanks, they can just buy up some coins and sit on them for years. Easy life.

jademaxxiss012

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yeah really i could agree with it also but one thing i am missing and that is the actual study of the number of investors investing crypto without proper knowledge? I guess if you are investing in cryptocurrency you had already the perception on how bitcoin works and bitcoin has easy concept on it. As we all know the rule on how to earn in investing bitcoin and that is already discuss during school days with demand and supply or demand and price. There could be no reason for an individual to invest because of moods but because they got the idea about bitcoin.

Crypto Id

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It's not completely true. But you can take it like when a news appears to the market, like China is going to ban crypto currency or any other. With the fear of these kind of news people think btc it is going to dump and many of them starts to sale there btc and unfortunately the btc price goes down.

1020kingz

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Quote from: CryptoRaymond on May 24, 2018, 09:28:43 AM

A study by finance professor Daniele Bianchi says that the prices of cryptocurrencies are influenced by the mood, hype and emotions of investors mostly rather than economic factors. It really sounds horrible. But I think it is partially true. Because if you see the number of people engagement with bitcoin, you will see that a large number of people came to this market after the vibe of BTC rising. And they entered here without gathering proper knowledge.

What do you think about this? What would be its effect???

It is partially true, there are many newcomers investing in bitcoin and it’s demand is getting more and more everyday. However although there are some factors that affect it’s price but bitcoin has its own economic system in cryptocurrency world. It is more like the world economics that the US dollar has the main stream of the economy, and if this currency goes up or down almost all the currency in the world is affected. Same in crypto, bitcoin is the main stream of crypto currency whatever it’s price it can affect to the other alts prices.

CryptoRaymond

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A study by finance professor Daniele Bianchi says that the prices of cryptocurrencies are influenced by the mood, hype and emotions of investors mostly rather than economic factors. It really sounds horrible. But I think it is partially true. Because if you see the number of people engagement with bitcoin, you will see that a large number of people came to this market after the vibe of BTC rising. And they entered here without gathering proper knowledge.

What do you think about this? What would be its effect???

Topic: BTC price moved by emotion and mood! - page 3. (Read 407 times)