Predicting crypto prices: Essential factors driving market trends
Building a successful crypto portfolio revolves around a simple concept: invest in digital assets with high expected returns in 2025. However, identifying which ones can perform well can be challenging, especially when considering niche projects. You need to know what factors affect their market trends and how to use them to make educated decisions as an investor.
There are nuances in crypto trading that are too advanced to jump right into. Sportsbet.io aims to introduce newbies to the essential fundamentals. Here are the key factors to look into and how they help in coin price prediction for 2025 and beyond:
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The intrinsic value of cryptocurrency
Intrinsic value refers to how valuable an asset is perceived by the market. In simple terms, if the public deems a crypto valuable, that sentiment often holds true. Therefore, the best way to gauge a crypto’s worth is to see if there is a high demand for it right now. You can further study a crypto’s intrinsic value by studying how it performs in the following sectors:
Tokenomics
Tokenomics shows how the asset is used and distributed. It includes how you can earn or mint it, the mechanisms keeping it either inflationary or deflationary, and its circulation speed in the market. The most ideal state for a potentially bearish crypto price prediction is high demand paired with low supply as seen with Bitcoin (BTC).
It’s also possible for crypto prices to rise even if they have a large or infinite supply like Ethereum (ETH). The asset has no maximum distribution limit, but the demand for its native token is so high that the prices and trade volume increase significantly. The Ethereum network has an asset-burning mechanism to counter inflation in the market, which factors in its long-term value.
Adoption rate
The adoption rate measures how rapidly the user base is growing as time goes on. Depending on the analysts, they can identify new users in different terms. Some of the most popular metrics are the increasing number of crypto wallets holding and trading the asset, businesses accepting it as payment, or projects using the currency.
Whichever the metric is, the ideal state for the best crypto price prediction is growth in your desired field. For example, a trader will be excited to see a rising number of companies trading the asset popular in 2024 with the advent of exchange-traded funds (ETF). Developers, on the other hand, are pleased to see a stable ecosystem in decentralised finance (DeFi).
Project utility
A crypto’s value is tied to the popularity and utility of the network it supports. Ethereum is one such example because ETH is used as the utility token for the network and the projects built on it. Every new blockchain project made on Ethereum can directly convert its minted crypto to ETH, giving the latter more uses as it grows.
Another crypto project seeing significant growth this way is Solana (SOL), a crypto smart contract platform like Ethereum. It is already making headways for crypto ETFs and exchange-traded products (ETP) offered by major exchanges like Bitwise and Grayscale.
Project utility is expected to be a major factor among crypto ecosystems for 2025 and beyond because millions are already pouring into its economy. With many projects funded, the vision for Web 3.0 can soon be a reality, with Ethereum and Solana leading the charge. Other blockchains like Polkadot (DOT), Polygon (MATIC), and Tron (TRX) also show great potential to thrive in the coming years, making project utility a key factor to watch for future growth.
Macroeconomic trends
A digital asset’s intrinsic value is affected by economic and societal shifts. Thus, you must pay attention to these macroeconomic factors to make informed future crypto price predictions. Key areas to focus on include:
Regulations per jurisdiction
Every country has strong opinions on DeFi and its potential, and traders’ eyes are glued to nations with the biggest investors. The years between 2020 and 2024 were eventful for blockchain investors involving the Securities and Exchange Commission (SEC) in the United States (US). There have been many setbacks and progress, but a pro-crypto movement is foreseen for 2025.
The biggest hurdle for pro-crypto investors in the US was the old SEC framework. It caused friction with major entities like Ripple Labs (creators of Ripple XRP) and exchanges like Binance and Coinbase. The cryptocurrency price prediction was pessimistic for Bitcoin until Donald Trump won the 2024 US presidential election.
Trump appoints pro-crypto advocate, Paul Atkins, to take over as SEC chairman effective 20th of January 2025. It will bring about major changes to the US compared to the current leadership of Gary Gensler who is notorious for his anti-crypto decisions. Thus, crypto institutions are optimistic about getting more approval for their offerings than ever before.
Inflation and monetary policy
Knowing the current state of monetary policies can determine how strong a nation’s economy can be for the long term. This will directly impact crypto market predictions if that country is a known supporter of any digital asset.
For example, BTC topped $100,000 in December 2024 because people excitedly bought it in November after Trump’s election victory. The US has a strong draw for Bitcoin and Ethereum because they have a strong economy and the new administration has a pro-crypto stance.
Any digital asset can expect an upward trend if economic powerhouses join its economy. Other countries traders are watching closely are China, South Korea, and India. Among these countries, South Korea is the only one with a clear interest in investing in crypto. The other two have a cautious and restrictive approach towards DeFi but have taken action to explore legal changes.
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Technical indicators in charts
Technical analysis refers to the identification and interpretation of indicators. It involves knowing the support and resistance levels of the asset so you can start seeing recurring patterns. This can show you which direction prices will take and when the market remains consistent.
The factors above will have you following news and trends from various perspectives which can be time-consuming. Technical analysis offers a more focused approach. Learning how to read charts and understand technical indicators requires dedication but it can be valuable, especially on how to predict cryptocurrency prices and make smart decisions as an investor.
However, technical analysis doesn’t show you the full picture. It will show you projections but won’t indicate specific reasons for why it’s headed in that direction. Many crypto have surpassed analysts’ expectations. For instance, analysts predicted Bitcoin would only reach up to $80,000 in the first half of 2024 but it surpassed expectations as it reached $100,000 in the first week of December.
Emerging trends, even outside of the blockchain community
Emerging trends refer to topics gaining social attention for one reason or another. However, some may not be intentionally designed to integrate with crypto but developers find ways to integrate them into the blockchain space.
A great example is artificial intelligence (AI) which is specifically about machine learning for various industries. DeFi developers are now studying how it can help optimise or improve smart chain operations.
Likewise, there is also Web 3.0, which is mostly built on the blockchain ecosystem, which will play a crucial role in shaping coin predictions. Projects being developed in its ecosystem are made to have a variety of uses across different industries, even outside of finance. As more developers focus on Web 3.0, it adds more excitement towards crypto in the long run.
Why these factors matter for predicting price trends
Crypto price trends are driven by social changes because an asset is linked to the demand it generates. Knowing all of these factors gives you an insight into the future market movements. Staying informed about how developments like AI and Web 3.0 shape the crypto landscape helps you make better crypto future predictions and remain a resilient investor in the dynamic world of digital currencies.
Frequently asked questions
Here are some of the most frequently asked questions about crypto price predictions:
How to know which cryptocurrency will go up?
Look for assets that are trending on social media or seeing a surge in trade volume in exchanges. It means those assets are getting high demand and you can expect a long-term upward trend.
How to predict crypto price?
Crypto predictions are based on technical knowledge and social awareness. Knowing its key factors and then staying updated with news on crypto-related trends will help you predict the market.
What affects crypto prices or how are crypto prices determined?
Crypto prices are driven by many factors revolving around supply and demand. Tokenomics is the core of its market activities so remember to read how it works in the whitepaper.
Why crypto prices are different on different platforms?
The primary driving factors of crypto prices are trade volume and takers’ bids. These can be different between exchanges or brokerages depending on the activities on that network when transactions happen so fast and in large volumes.
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