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The role of economic indicators in predicting market trends of cryptocurrencies
The cryptocurrency was nothing meteoric, and prices fluctuated wildly and unpredictable within a few hours. While many have been found that economic indicators are recognized by economic indicators in shaping market trends.
** What are economic indicators?
Economic indicators are indicators that track health and the results of the economy, provide insight into its general condition. These indicators can be divided into several categories, including inflation rates, GDP growth, interest rates, employment numbers and shopping balances. By analyzing these indicators, economists and investors, they can better understand how they can sell conditions.
Relationship between economic indicators and cryptocurrency prices
Cryptocurrencies are known for high variability, and prices often experiment quickly fluctuations in response to various economic events. Cryptocurrencies
Some key economic indicators related to cryptocurrency market trends include:
- When the inflating is high, central banks can be forced to raise
- And vice versa, a poor GDP growth rate may signal the deterioration of the economic situation, which can lead to lower prices.
- interest rates
: changes in interest. Example when interest rates in countries with strong economies,
- Number of employment : A strong increase in employment and the number of workers may indicate a healthy economy, which leads to an increase in investors’ trust and potentially higher cryptocurrency prices.
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Real examples of economic indicators and cryptocurrency prices
Here are some real examples that illustrate how economic indicators influenced the market trends of cryptocurrencies:
- 2013: The Rise of Bitcoin
In 2013, when GDP growth in China dropped significantly, the price of Bitcoins increased rapidly, reaching the highest level. This
- 2018: Trade War in USA-Chin
As a result, the dill of trading war of the US-China 2018 increased rapidly.
- 2020: Pandemic Covid-19
Economy, including negative fiscal stimuli packages. This led to increasing investors’ trust in cryptocurrencies, such as Bitcoin, which increased its price significantly.
Application
The relationship between economic indicators and cryptocurrency prices is undeniable, with each indicator plays a significant role in shaping market trends.
