Bitcoin, price fluctuations and media coverage.It seems that some journalists and bloggers are beginning to panic concerning the price of Bitcoin. “Bitcoin is going to burn” or “the end is nigh for Bitcoin” and other negative titles. However, when reading the articles, some paint a different picture than what they’ve written in the title of their article or blog.
The ones that do not make nuances in their writing and say “the end of Crypto” or something along those lines do not have any consistent unbiased evidence and facts to back it up these claims. The main “fact” these writers point to is that there is a “significant” price drop and that such a price drop is “strange”.
Dear readers, such price drops are common when someone who has a lot of BTC or stocks sells them off. So when the US government tells the world they are selling their confiscated BTC, of course everyone who has Bitcoins will think “blast I will not get a high price while these US government types are selling their BTC batch so let’s sell them now”.
This way of thinking and acting has been documented many times throughout history. From the Wall Street crash in the 1920’s to the fall in airplane companies stocks after 9/11, people want their money back when there is something significant happening involving a company that they have invested in. So news about a company, digital currency or people who have lots of shares/stocks/BTC/whatever dumps them suddenly (or if they announce their pending sale) will make other owners very “frightened”.
Of course, there are some people in the media who prey on these fears by writing suggestive articles and dubious reporting. We know where they come from. A good dramatic title can draw in potential readers. Some media companies do tend to use this modus operandi to lure in readers. It is a good way to spark off a conversation or debate but it still remains suggestive reporting.
Now let’s focus in on the recent developments. The BTC price rose steadily (with some ups and downs along the way), generally speaking, until the US government released the news that they will be selling off their 30000 BTC. 30000 BTC is about 16,720 million dollars/ 12,390 million € using a BTC converter, which is no small amount. (Of course there were rumors before the press release and some people acted on that unconfirmed rumor and as such the BTC price was fluctuating a bit).
Whenever such an amount is reported to be thrown into the public market, it does have an impact, regardless if it’s BTC, other crypto currencies or shares from Apple. ( we will add some links on the how and why, along with some examples in the bibliography). It is also about demand, availability and other factors that play a role in the price of a product. If there is a sudden increase of products, BTC or other products, the price will drop because there will be more items of said product available then there is a demand for it.
Conclusion: the BTC price drops isn’t that “ unnatural” or “worrying”, its natural. We do have some concerns about all this “hyping” and “making a fuss” about something that is only natural and the fact that some “reporters” prey on the fears of the readers, just to get that a higher visitor count on their blog or website. Are these “reporters” bad or worse? Not necessarily but they have to realize that they are manipulating the price of BTC in a way ( maybe that is their goal all along).
How can you arm yourself against such suggestive articles? Do research and do not trust one source. For example: If you are day trading BTC or other crypto then some information about: stocks, candlesticks, price, demand, availability, fluctuations, previous crashes etc. should be a good start to analyze and understand the BTC or other alt coin courses on the exchanges.
This is just a very small part of easy accessible source materials but you can also look at university courses and books surrounding economics, trading stocks and subjects like that.