How To Know When Crypto Will Rise Or Fall

A common argument against cryptocurrency is that coins gain and lose value chaotically, and their price is impossible to predict. But, if we tell you that with basic knowledge and the ability to anticipate the results of global events, you can recognize potential opportunities?

In today's article, we will discuss the key elements that will help you determine the value of a coin, as well as you know how elections in the USA have impacted the world of cryptocurrency. Stay tuned to learn how to find diamonds at the start.

How Are Cryptocurrencies Prices Determined

Understanding the mechanism of certain elements will give you the key to accurate predictions in the cryptocurrency market. These factors can be both internal and external. Let's take a closer look at them:

• Tokenomics

The term combines "token" and "economics". It is the study of the "supply and demand" of a particular coin. Each project develops its own tokenomics plan that will best meet the needs of the market.

Simply put, it is the internal economy of the project, which includes emission, the distribution mechanism of tokens, and their application. Projects with elaborate tokenomics, where demand exceeds supply, tend to become more expensive. For example, a deflationary supply is a good strategy where tokens increase in value over time due to rising scarcity.

• Market Listings

The crypto project's roadmap indicates the stages of listing on various exchanges, which serves as a guarantee of the developers' reliable strategy. Therefore, digital assets tend to rise in price before listing on popular exchanges, centralized (CEX) and decentralized (DEX).

Each type of exchange has its own advantages. For example, through CEX, it is possible to attract investors and additional funding to the project. DEX listing shows that developers also value user privacy and are ready to provide a more anonymous transaction option, which can attract more followers and form a community.

Accordingly, once tokens are delisted, the coin significantly loses value. This often happens due to security issues or low trading volume.

• Value Proposition

Explore the goal and concept of a DeFi project, look for the advantages that the team offers to potential users. If a cryptocurrency solves a specific problem, offers innovations, and has practical value, the project will be in demand.

For example, the value and uniqueness of Ethereum lay in the implementation of smart contracts at an early time, and today it is one of the most popular platforms for decentralized applications (DApps). And its successor Solana achieved success due to the improved ETH system with higher throughput and lower fees.

Once we understand the basic elements of a crypto project, we can move on to a deeper market analysis. Follow us!

How To Analyze Crypto Price Fluctuations

This type of financial analysis is used by more experienced traders. It is considered the foundation, without which it is impossible to see the opportunities of growth or falls. It consists of three parts:

• Technical Analysis

During technical analysis, traders study the project's statistics with the help of various indicators: historical price fluctuations, RSI, trend lines, and moving averages. The idea behind this analysis is that there are trends in cryptocurrency that repeat, and they can be tracked on charts. Therefore, it focuses on studying price movements and trading volume to forecast the future direction of the project.

• Sentiment Analysis

Sentiment analysis studies the feelings and emotions of traders, allowing them to predict the market position independently and test the investor’s gut feeling. Later, crypto analysts compare market data and trader behavior, thereby revealing patterns. For example, the connection between frenzied demand and panic selling.

Social media accounts, forums, and news articles from crypto experts also become the focus of attention during mood analysis. As a rule, experienced investors have already learned not to succumb to the widespread panic during market surges and crashes, so their opinion is particularly important at such times.

• Fundamental Analysis

It involves evaluating all aspects of the market, both global and internal with political and economic conditions. The main difference from technical analysis is that fundamental analysis makes conclusions based on future events rather than past price charts.

This type of analysis can help traders determine the value of digital assets based on a wide range of information. It is often used for long-term price forecasting. Let's look at fundamental analysis in more detail. We will show specific events and patterns of behavior within them.

Key Events That Indicate Crypto Will Rise

Let's start with the events that could trigger the potential growth of cryptocurrencies.

Crypto-Friendly Government

An event that triggered a huge number of reactions and discussions in the information space. We couldn’t ignore it either. As we know, Donald Trump's victory had a positive impact on the cryptocurrency market, and we already saw Bitcoin soar to $97,000. During his previous US presidency, Trump actively supported blockchain innovations, which created a favorable environment for the growth of the DeFi market.

In the present time, his victory could also lead to a further market surge, as his policies are aimed at developing technological sectors, including the crypto industry. Currently, Trump is supported by Elon Musk, who is actively advancing meme coins, particularly DOGE. It means we can also expect new investors to enter the space.

Meme Hype Around Cryptocurrencies

Meme hype is a moment when a cryptocurrency gains popularity thanks to viral memes or celebrity endorsements. An example is the well-known Dogecoin, which surged due to jokes and Elon Musk's support. Recent examples include the buzz around DOGWIFHAT and PNUT. However, such growth is rarely sustainable, as interest in these currencies tends to fade quickly, leading to a sharp price drop.

General Market Situation

The general state of the market also affects cryptocurrency. Let's talk about two De-Fi market conditions: bear and bull markets. A bear market is a period when prices have been falling for at least two months in a row and the decline is at least 20%. Investors become pessimistic, which leads to a further sustained decline in asset values.

A bull market, on the other hand, is characterized by rising prices due to positive news, such as the introduction of blockchain, relaxation of regulations or new technologies. Sentiment analysis helps predict price movements: a bear market signals a decline, while a bull market signals a possible rise.

Weakening Control By The Authorities

The easing of regulations is one of the most reliable indicators. If authorities reduce pressure, for instance, by allowing the use of cryptocurrencies in international settlements or simplifying conditions for exchanges to operate, the market responds positively.

A prime example with XRP. When the SEC sued Ripple in 2020, the price of XRP plummeted. However, after the court ruling in 2024, which vindicated Ripple, its price rose from $0.5 to $0.6 in one day. This demonstrates how legal decisions can affect the price of cryptocurrency.

Greater Integration Of Cryptocurrency In People's Lives

Another significant factor is the integration of cryptocurrencies into traditional finance and everyday life. Imagine if major banks started using Ripple’s blockchain for transfers or if the United States included Bitcoin in its reserves. Such steps would undoubtedly capture public attention and increase the level of engagement with the digital world.

Thus, expanding the use of cryptocurrencies in daily life could have a positive impact on the market. The more ways tokens can be utilized in real life by ordinary people, the higher their value becomes. For example, if banks begin to widely adopt smart contracts, it would serve as an important signal for the market.

Halving

Halving often has a positive effect on cryptocurrency prices. The essence is that the reward for mining blocks is halved, reducing the rate of new coin issuance and increasing scarcity. For instance, after the 2020 halving, Bitcoin's value rose significantly.

Key Events That Indicate Crypto Will Fall

Now let's turn to the events that could affect the crypto market's downfall.

Crypto-Unfriendly Government

Perhaps if Kamala Harris had won the election, the decentralized market would have suffered stricter regulatory measures. Previously, Harris expressed concerns about cryptocurrency restrictions and investor protection. Consequently, she planned to impose stricter taxes and bans on certain transactions. These policy changes could negatively impact crypto investments,which would reduce demand for the market.

Increased Pressure From Regulators

This factor can significantly undermine not only the market but also the reputation of cryptocurrencies in general. Currently, cryptocurrencies are synonymous with security, privacy, and decentralization.

Now, imagine the opposite: bans, new taxes, and stringent requirements for platforms and users. All of this creates uncertainty and reduces trust in digital assets. Large investors, sensing a threat, may begin to sell off their assets in large volumes.

Ban On Cryptocurrency Use

If authorities impose a ban and restrict access to cryptocurrencies, trading and adopting them will encounter challenges. These restrictions can reduce market liquidity and limit investor participation. Insufficient demand or low trading activity may cause prices to drop.

Thus, today we have told you a detailed overview of financial analysis and its components that will help you spot a diamond in the market, invest in time, and become wealthier. The key is to stay at the center of events and keep an eye on changing trends in the digital space. Cryptomus will help you stay informed!

Which type of financial analysis do you like better? Write about it in the comments.