In the booming digital currency market today, Bitcoin, as a leader, has always attracted much attention for its price fluctuations. What factors determine the rise and fall of Bitcoin? This article will explore the basis of Bitcoin price fluctuations in depth and unveil the mystery of this digital currency world.

The rise and fall of Bitcoin prices do not come from the air, but are affected by many factors. First, the supply and demand relationship in the Bitcoin market is an important driving force for price fluctuations. As more and more investors and institutions pour into the market, the demand for Bitcoin continues to increase, while the total amount of Bitcoin is limited, which leads to price increases. At the same time, once market sentiment is affected, investors sell Bitcoin in droves, and when supply exceeds demand, prices will naturally fall. For example, at the end of 2017, the price of Bitcoin soared to more than $20,000, and fell to thousands of dollars at the beginning of the next year. Changes in market supply and demand directly affected price fluctuations.

Secondly, the macroeconomic situation also has a profound impact on Bitcoin prices. Factors such as global economic instability, political turmoil, and currency depreciation will drive more investors to turn their funds to safe-haven assets. As a decentralized, limited-issue digital currency, Bitcoin is regarded as one of the first choices for safe-haven assets. For example, when the COVID-19 outbreak occurred in 2020, global stock markets plummeted, while Bitcoin prices rose. Investors' uncertainty about traditional financial markets prompted them to seek safer investment targets.

In addition, technical factors are also one of the important factors affecting Bitcoin prices. Technical parameters such as Bitcoin mining difficulty, blockchain technology development, and transaction speed will directly or indirectly affect Bitcoin prices. For example, the difficulty of Bitcoin mining has gradually increased over time, which has led to a slowdown in the issuance of new Bitcoins, thereby affecting the market's perception of Bitcoin scarcity and, in turn, affecting price fluctuations.

Finally, market expectations and sentiment are also important drivers of Bitcoin price fluctuations. When investors are optimistic about the future development and application prospects of Bitcoin, prices tend to rise; otherwise, they fall. For example, events such as Bitcoin forks, regulatory policy adjustments, and hacker attacks will trigger market sentiment fluctuations and directly affect the trend of Bitcoin prices.

In summary, the rise and fall of Bitcoin prices are the result of the combined effect of multiple factors, and supply and demand, macroeconomic conditions, technical factors, and market sentiment all play an important role in it. When participating in Bitcoin transactions, investors should consider these factors comprehensively, view price fluctuations rationally, avoid blindly following the trend, and avoid stepping on the minefield of the market. The future of Bitcoin is full of variables. Only by doing sufficient research and risk control can you be invincible in the digital currency market. May you sail smoothly in this ocean of digital currency, seize opportunities, and meet challenges!

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

As we all know, the recent surge in the price of Bitcoin has attracted the attention of a large number of investors. However, looking at the history of Bitcoin, the price of Bitcoin has surged and plummeted. When it surged, many investors became rich overnight, and when it plummeted, many investors felt like they were being ripped off, and their funds were lost in the end. Therefore, all those who invest in Bitcoin want to know what is the basis for the rise and fall of Bitcoin? The following editor of the currency circle will tell you about this issue.

 What is the basis for the rise and fall of Bitcoin?

1. The shrinking supply of Bitcoin

We all know that every time Bitcoin production is reduced, Bitcoin will have a large rise and fall. For example, on the 12th of this month, Bitcoin ushered in the third production reduction in history. The recent market fluctuations are obvious, indicating that this is one of the important factors.

2. National policy

In the past period of time, the implementation and formulation of policies in South Korea, Japan, the United States, and China have all affected the trend of Bitcoin prices.

3. Hackers, technical reasons

Although the security of digital currency has been highly praised in its development, there have been several technical crises. For example, Bitfinex, the largest Bitcoin-US dollar exchange, was hacked and 120,000 Bitcoins were stolen. Bitcoin fell by 25% in the following six trading days.

4. The good and bad news we often talk about is also an important factor that will affect the rise and fall of the currency value.

5. Trend or band traders, investors

We are talking about us. This kind of people are bullish or bearish, which indirectly causes the rise and fall of the market. If there are more bearish people, the market will fall, because everyone will throw out the chips in their hands, and even sell them at a high price with chips. If there are more bullish people, the market will rise, because everyone will exchange the principal in their hands for chips and wait for the rise, and this kind of people in the market will constantly change their identities, so the market will rise and fall.

6. Public recognition

More and more countries recognize the legal status of Bitcoin, which makes Bitcoin demand higher.

 How to see the rise and fall of Bitcoin?

When investing in digital currencies like Bitcoin, it is very important to know how to see the rise and fall. If you don't even know how to see this, then it is basically a foregone conclusion that you will lose money when investing, and you can only guess blindly or blindly follow others to invest. How to see whether Bitcoin has risen or fallen?

First of all, to see the rise and fall of Bitcoin, you need to look at the trend of the Yin-Yang line on the chart. If it is a Yang line, it means it is rising, and if it is a Yin line, it means it is falling. If the closing price is higher than the opening price, then the bulls have the upper hand. If it is a Yang line, it indicates that there is a possibility of rising in the next stage. If newcomers don't know how to see the rise and fall of Bitcoin, they can also look at the size of the entity. The larger the entity, the more obvious the power of rising and falling.

In addition, we can also check the length of the shadow line. The longer the shadow line, the more unfavorable the price of digital currency is at that time. Newcomers should not only learn to see the rise and fall, but also know which factors are related to the change of Bitcoin price.

The above is an analysis of the basis for the rise and fall of Bitcoin. The editor of the currency circle kindly reminds you that in the early stage of investment, don’t buy too much, you must know how to allocate your property, if possible, you must reserve more living expenses to improve your ability to resist risks. In addition, don’t invest all your funds in Bitcoin. You should appropriately purchase some low-risk financial products for combination. It is best not to exceed 30% of the total investment amount for high-risk investments. In addition, before investing in Bitcoin, you must understand Bitcoin, keep a clear and calm mind, and stick to the long-term investment direction.