When it comes to newer and less efficient markets, they tend to be primarily influenced by news sentiment and media discourse. Thus, it is essential to conduct media analysis while trading cryptocurrencies. Still, as soon as you open any crypto news website, dozens of news pieces will start pouring down on you. In this article, we will focus on which news types impact crypto prices the most and, thus, are worth paying attention to.
Regulation
Since crypto is a mostly unregulated industry, such news tends to influence the digital assets rate. Thus, the market is usually more volatile, while regulation news dominates the media. For instance, when China bans some crypto activity, the Bitcoin price seems to drop. On the other hand, when El Salvador accepted BTC as an official payment means, its price experienced a short-term rally from $45k to $48k.
Mass adoption
Another type of news that impacts crypto rates is mass adoption. The market turns bearish if some major company announces new crypto features or partnerships. For example, when PayPal added functionality to buy, sell, and store crypto to their app on June 7th, 2022, the Bitcoin price went from $29,400 to $31,300 in hours.
Platform updates
Naturally, crypto platform updates significantly influence the digital asset space. If the crypto company adds new features or improves the system, its native coin’s price will likely go up. When Ethereum developers confirmed the Merge date for 15-16 September, the ETH price soared from $1,600 to $2,000. On the other hand, when crypto lender giant Celsius announced the pause of withdrawals, all hell broke loose, followed by the top cryptocurrencies falling 15-20%.
Macroeconomic trends
Cryptoсurrencies are a part of the global financial market, making digital assets susceptible to macroeconomic trends. 2022 is a perfect example — each time the US Fed announces a new spike in the interest rate, BTC seems to be on a roller-coaster. Moreover, stocks and cryptocurrency prices seem to drop each time the inflation report comes with higher numbers than expected.
Elon Musk’s Twitter
Although this subheading is intentionally provocative, it does bear some truth. The public statements of famous people, such as celebrities or entrepreneurs, can send a coin to the moon or bottom. Elon Musk, for instance, is renowned in the crypto community for his numerous Dogecoin tweets. In May 2021, he announced his satellite Doge-1 would fly to the moon, and the token’s price doubled. The same principle applies to other famous people with big social media followings.
Consider the overall market sentiment
While analyzing the crypto news, focus on the overall industry sentiment. It will help you to predict market trends and form an efficient long-term investment strategy. Still, when it comes to short-term trading, news and opinion analysis will be less efficient than technical tools.