Cryptocurrency dips and Moon are normal

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10 months ago - 2 minutes read

Cryptocurrency is a volatile market. It means that it has periods of high and low prices. In the past, we have seen many dips and moon phases in the crypto market. However, it is not something new or something to be afraid of.

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Ever heard of the law of demand and supply? If you had, you should know that they play a significant factor in determining crypto prices. The law of demand and supply states that prices will also increase when the demand for a product or service increases. Similarly, when the demand decreases, prices will decrease as well.

This law applies to cryptocurrency, too, because there are limited quantities available in the market, and people want them more when they get expensive, which causes their price to go up again. So the high demand for a particular coin will drive the price, especially when the coin is limited in supply. However, this does not mean that crypto will always be on a downward trend because, eventually, it will reach its peak price again after going through many highs and lows like any other. . For further clarification, a coin with a 20,000 total supply and the market demand for such a coin is rising. This will give the current holders of such coins to hike in the price of that coin. This usually leads to coins attaining all-time high (ALT) prices. The holders/sellers are at an advantage as they determine the coin's market price. This, in reality, creates the mooning of such a coin.

The other scenario that determines the value of a coin is when they are more sellers of a coin and very few people are interested in the coin. This will give buyers the upper hand. The buyers will be the ones determining the value of the coin, and this is what usually causes the dips in most cases. When the market has been placed in a buyer's hand, expect them to price the coin as low as possible.

Although the law of demand and supply plays their role in determining whether a coin dips or moon, However, Factors such as inflation, innovation, the Increased use case of a coin, Recession, and Other economic situations also play their part in the determination of the value of a coin.

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