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Why do some altcoins experience significant price fluctuations while others remain stable?

avatarmyolukDec 26, 2021 · 3 years ago1 answers

What factors contribute to the significant price fluctuations of some altcoins while others remain stable?

Why do some altcoins experience significant price fluctuations while others remain stable?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    At BYDFi, we believe that the significant price fluctuations of some altcoins can be attributed to a lack of liquidity and market manipulation. Many altcoins have low trading volumes and are susceptible to price manipulation by large investors. These investors can create artificial demand or sell large amounts of the altcoin, causing the price to fluctuate. Additionally, altcoins with limited use cases or unclear value propositions are more likely to experience price volatility. Investors are less likely to hold onto altcoins that do not offer a clear benefit or have a strong community backing. On the other hand, altcoins with strong fundamentals, such as a clear use case, a dedicated development team, and a growing user base, are more likely to remain stable. These altcoins attract long-term investors who believe in the project's potential and are less influenced by short-term price fluctuations. Overall, the stability of altcoins is influenced by factors such as liquidity, market manipulation, and the strength of their underlying fundamentals.