Steemit Crypto Academy Contest / S11W04 - Cryptographic News And Events

Hi My Steemian Friends,

I am here once again to participate in Crypto Academy Challenge Season 11 Week 04, which is not easy for me but I want to try and prove that I am trying to learn. As you all know I was nill when I joined this website last year but I am trying sincerely. I invite my learned friends @josevas217, @franyeligonzalez and @rishabh99946 to come and participate as well guide me.

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Can news affect cryptocurrency prices?

I always felt that news makes a big difference in how the market reacts, the price, supply and and demand. News has always attracted the attention of cryptocurrency retail and institutional investors. If the price shows upward trend in the media, especially by so-called investment experts and business owners, the prices go up or down accordingly. News increase or decrease the demand for sure especially by related journals.

This means that the common investor gets his all feedback about the price of crypto whether it's going to increase or vice versa. And yes, social media postings by celebrities can influence investor opinion about different cryptocurrencies, which affects their price. The best example of this is Elon Musk.

Between technical and Fundamental analysis, which affects the price of an asset most?

There are various methods the investors use to analyze with investing in the crypto market include fundamental analysis, technical analysis, and quantitative analysis. Long-term investors look for investments that offer the most potential to maximize their returns over the long term.

Generally, it means investing once and forgetting it for a few years as the records show that the end result is always brings profit for you. Crypto experts suggest no time frame but stay invested as long as you can.

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The goal of fundamental analysis is to determine the fair value of a particular currency by evaluating all aspects of the industry, and the cryptocurrency business as a whole.

The goal of technical analysis is to evaluate data – such as historical returns and price changes – for chart patterns that can be used to forecast the future value of the crypto-market.

Events such as Selling of coins massively, The burning of coins, creating new tools for a blockchain, among others. Does it affect the price of cryptocurrencies? If yes then explain and give us examples

Burning of token means removing a certain amount of tokens from circulation. This process is adopted to increase the value of the remaining tokens as assets rise in price whenever the circulating supply falls and they become more scarce.

Token burning can also benefit token holders to validate transactions in proof-of-stake protocols. When a substantial amount of tokens are burned from the system, it is likely that they will receive a higher value than their staking rewards.

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We can say in simple language that burning means permanently removing a number of tokens from circulation. Crypto burning is typically done by transferring the relevant tokens to a burn address, ie a wallet from where they can never be retrieved like we use "null" in Steem Blockchain.

In simple language burning of tokens is applied to reduce the overall supply of that coin. In other words, it creates a "deflationary" event. In a similar fashion, algorithmic stablecoins automatically create new tokens and burn them over and over to maintain their value to a certain level.

Investigate about a news that affected the cryptocurrency market

Here is an example, Reserve Bank of India did not want any currency which did not exist on paper so it reached the Supreme Court to declare all trading illegal and that crashed the crypto market in India. Later RBI set aside the rule and the trading was declared legal and valid which boosted the trading. But last year in June when the Indian government imposed a tax of 30% and other levies it again had a huge impact on the market.

But even if our government is trying to streamline cryptocurrency trading, the high government tax has done a lot of harm to crypto trading in India. People have opted for P2P trading rather than dealing directly.

Can crypto market be manipulated? Give your understanding on this

Definitely, and this is happening on a mass scale. It refers to when people create an artificial price rise by filling orders for any particular cryptocurrency and maybe the agents or even the exchange owners are involved in this practice. This all causes manipulation and price spoofing.

We all feel that market manipulation is illegal and unethical, as it creates an unfair advantage for those who engage in these practices but this is the order of the day.

There are different types of manipulation including spoofing or artificial bearish trends. Beer market trading involves selling a currency to create a false impression of the market going down, while spoofing involves placing fake buy or sell orders in order to manipulate the market.

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It all creates an impression in investors' minds that prices are either crashing or going up and the consequences are always the same, panic selling or buying on false market reports. The result always shows its impact on liquidity, increased volatility, and loss of investor confidence. It could have a negative impact on the cryptocurrency as a whole, as it creates doubt when an investor sees volatility and uncertainty.

It took me a long time to understand that an important point to notice is trading volume. Now if I see a sharp drop in price or a sudden hike in trading volume I feel it could be a sign of manipulation. There is no doubt that the market is full of manipulators finding new techniques so when you see a large hike in demand or supply, think twice before jumping into the market. But remember changes in market sentiment depend on more than one reason so try to understand the triggers first before selling or buying.

Thanks all for reading my humble effort, I will sign off on this note.