Bitcoin traders engage in value exchanges involving tokens and other digital assets that define the demand and supply chain. However, each trader values their Bitcoin asset depending on different factors in the current and future markets. Price compression is where market players rely on predicted asset prices to set a high value for their assets under existing market conditions. The idea is that the projected prices will be a justifiable reason to trade in the current market at future rates. The proactive strategy by traders to engage in Bitcoin trading activities based on price compression has pros and cons. The pros are evident with the justification of the trades when predicted conditions come to pass. They include: Supply and Demand Trends of Bitcoin are Favorable The laws of demand and supply stipulate that increase in demand with constant supply leads to high asset prices. Increasing supply when demand is constant will lower asset value due to a lack of extra interest. The law applies to the valuation of Bitcoin in the crypto market. The nature of Bitcoin mining is that the number of new coins joining the blockchain keeps diminishing with time. The mining algorithm presents a Bitcoin halving mechanism that ensures its supply is cut in half every four years. However, the market inclination toward Bitcoin trading is steadily increasing, with people trusting it to be a secure trading medium. The increased demand under dimi...
