How Cryptocurrency rates especially BTC Fluctuate so quickly?

[pixie85]

Especially BTC? you should see some altcoins.

In the last 24h Bitcoin lost only 0.28% but XRP 2.7% and EOS almost 4%. Bitcoin usually is the most stable cryptocurrency

There are many reasons but I'd blame fake volume on exchanges, fake USDt buy orders, low liquidity and bot trading among many other.

[ampu]

As you know, bitcoin is a speculative asset and factors like 21 million bitcoins supply, 4 years of block reward reduction, CME contract GAP, chart template, miner, FUD, and related news About bitcoin, all of these factors combine to make the value of bitcoin unstable. Bitcoin's current market cap is around $ 200 billion and its transaction volume is around $ 35 billion. It is still very low compared to other markets. If in the future more money is poured into Bitcoin, the price change in this market will be more stable.

[AakZaki]

What drives the demand up high is the decentralization, coz many people wants to be pseudonymous when transacting online and it happened to be found in bitcoin. Another thing is from speculation, when people speculates it creates demand in some point but it's not always going high. So if you are asking why the price of bitcoin is rapidly going up and down, that's basically because of the mass speculation.

Speculation is mostly done by people who want more profits. Whales are one that creates speculation about the price of bitcoin and other coins. They play the market with their money. Highly volatile prices are a characteristic of cryptocurrencies. So it is necessary to be careful when investing and trading in crypto. Market manipulation and speculation are always carried out by whales to achieve their desired targets.

[wxa7115]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

Because there are no limits of changes within a day like stock market. There is no circuit breaker for the market to stop panic. Crypto market now is a free one, free of limits, free of circuit breakers. Price can move up or down without any limits.

Price in turn changes fastly because of price manipulation and news. People invest in crypto but most of them don't know what is bitcoin, and what are waiting for them in crypto market. Then when bad news come they panicly sell and good news release they buy with joy of FOMO. They should do opposite as the saying goes "Buy the rumors, sell the news".

This is an important factor when it comes to the volatility of bitcoin, most stock markets cease their operations if they crash too hard in a single day, while this may seem as if it is not a big deal we must remember that markets are dominated by basically two emotions and those are fear and greed, and when fear takes over the markets they collapse, however by closing the market temporarily those fears can be controlled and the price stops falling as fast.

Since bitcoin is a decentralized currency not such breaks exist, if panic takes over the market then all bets are off which is why the price can go down so rapidly as people panic and sell their coins at whatever price the can get.

[Chainsmokers]

bitcoin is one of the first coins created it's no wonder to see bitcoin becoming the most popular right now and the price of bitcoin is so high
but my advice if investing in bitcoin must be careful the market is in a state of correction afraid that the bear market will come again and last a long time

[bitzizzix]

Actually there are several things that make bitcoin fluctuate very quickly, and because of the supply and demand in buying and selling in the market and besides that the Pope is very influential in bitcoin fluctuations and manipulates bitcoin prices according to the targets and strategies he wants.
There are many other reasons for bitcoin fluctuation and all there will be news about what is happening with the movement of bitcoin and other coins in the market.

[HiringYou]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

Bitcoin's decentralized nature does not allow any system to decide a ceiling and floor for it's price.
Let's talk about the reasons-:

• First reason for such fluctuations is the varying demand of Bitcoin.For example if we talk about gold, we know exactly where it is used and we can somehow predict that when a hike can be observed in it's price.But it is totally opposite for Bitcoin. It's usage is not clear.Sometimes the demand is high and sometimes it is low but the supply remains the same.So that is why we observe a lot of up's and down's in it's price.
• Exchanges are also responsible for these fluctuations. If we talk about any trusted exchange.The number of users associated with it keeps on increasing.It builds a chain of users selling and buying their BTC's which also affects the price.
• Other reasons can be the manipulations done by whales according to their convenience, news regarding BTC on various platforms etc.

[Detrix]

A number of factors cause BTC rates to fluctuate so quickly. They include:
1. News events that scare BTC users
2. BTC's perceived value sways
3. Uncertainty over BTC's future value
4. Large currency holder risks
5. High profile losses that cause fear
6. Security breaches that cause volatility

You can read further here:

https://www.investopedia.com/articles/investing/052014/why-bitcoins-value-so-volatile.asp