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When it comes to cryptocurrencies, the phrase “to the moon” is often used. But what does it actually mean?
In short, when crypto enthusiasts say that a particular cryptocurrency is going “to the moon”, they are referring to its price surging upwards very quickly and dramatically.
What is it that makes a cryptocurrency’s price suddenly skyrocket? There are several factors that cause digital asset prices to explode.
News and media hype
When a crypto project gets buzz and attention, it can attract more investors, which drives up the price.
This is one of the most common reasons for a crypto price to moon. When crypto projects receive favourable and timely press coverage, investors become more interested and the price often goes up as a result. A digital asset might announce a token drop for existing holders, which could send the price surging.
Similarly, when negative news spreads, it can cause prices to crash. So, it’s important to always take news stories regarding crypto assets with a grain of salt.
Media coverage always has a big impact on crypto prices. When crypto assets start getting covered by mainstream media outlets, it often leads to a price increase. This is because more people become aware of the asset and want to get involved.
FOMO
FOMO, or the fear of missing out, is a powerful force. When crypto prices are on the rise, investors who don’t own any can feel like they’re missing out on easy money. This often leads to irrational buying, which can push prices even higher. This is because people want to get their hands on the digital asset before the price takes off like they are being told it will. Usually, assets that moon due to FOMO and media hype eventually come crashing back down.
Investor demand
Investor demand is another key factor that drives prices up. When more people want to buy a crypto than sell it, the price goes up. This is called “demand-pull inflation.”
Similarly, when there are more sellers than buyers, the price goes down. This is called “supply-push deflation.”
Investor demand can come from a variety of sources, including:
- FOMO
- Hype generated by influencers or the media
- Belief in the long-term potential of the project
When it comes to crypto, there’s often a lot of hype generated by influencers and the media. This can drive prices up, even if there’s no underlying fundamentals to support it. This is why it’s important to do your own research before investing in a particular cryptocurrency – especially at a specific time.
New partnerships
One of the most common reasons for a crypto price to the moon is due to new partnerships, listings, or developments.
A popular example is when Binance announced that it was listing XRP on its exchange, the price of XRP spiked by over 20%. This was because Binance is one of the largest crypto exchanges in the world, and listing on Binance typically leads to more liquidity and exposure for a crypto.
Other examples include when Coinbase listed Ethereum Classic (ETC) on its exchange, or when Bittrex announced it was launching USD trading pairs.
In both of these cases, the crypto prices spiked because there was more demand from buyers who wanted to trade the crypto on these new exchanges.
What this means is that a crypto can “moon” or increase in price rapidly, in response to new developments or listings on popular exchanges. This is one of the key reasons why crypto prices are so volatile – they can move very quickly in response to a wide range of stimuli.
A continued bull run
During a bull run, you will often see the price increasing very rapidly. This can be a great time to buy crypto, but it can also be a risk as prices could come crashing down just as quickly. A crypto asset bull market is typically characterised by a sustained increase in price over a period of time.
The most recent crypto asset bull markets were seen in 2017 and 2021.
Bitcoin, Ethereum, Ripple, and Dogecoin are some of the most popular crypto assets that have seen incredible price growth during bull markets.
Popular examples of crypto assets “moon-ing”
Bitcoin
Bitcoin is the most well-known crypto asset and it has had several bull runs throughout its history. In 2017, the price of Bitcoin went from around $1,000 to nearly $20,000 in just a few months.
Ethereum
Ethereum is another popular crypto asset that has seen its fair share of bull markets. In 2021, the price of Ethereum rose from around $1,000 in January to nearly $5,000 by October.
Ripple
Ripple is a crypto asset that has seen meteoric growth in recent months. In December 2017, the price of Ripple was just $0.25 but it rose to over $3.00 by early 2018.
Dogecoin
In January 2021, the price of DOGE increased from around $0.01 to over $0.70 by May 2021.
Key takeaways
There are a few key things that you need to watch for when crypto is mooning.
- Unusual buying activity: If you see a crypto asset that is being bought up more than usual, it could be a sign that it is about to moon.
- Price predictions: Pay attention to what crypto influencers are saying. If they are predicting big things for a particular crypto asset, it could be an indication that it is about to moon.
- News and media coverage: If there is a lot of positive news and media coverage surrounding a particular crypto asset, it could be a sign that it is about to moon.
Keep your eye on these indicators and you’ll be able to spot when crypto is about to moon.