In-depth analysis of the rise and fall of Bitcoin

In the world of digital currency, Bitcoin, as a highly volatile asset, has attracted the attention of countless investors. Especially in the past few years, the price of Bitcoin has experienced dramatic ups and downs, becoming an important topic in the global economy, financial markets and even technological development. By analyzing the rise and fall of Bitcoin, investors can not only better understand the characteristics of this asset, but also make more informed decisions in a complex market environment.

First of all, the price fluctuation of Bitcoin is not accidental, it is affected by many factors. From the macroeconomic environment, policies and regulations, to market sentiment, technological progress, etc., all these factors are constantly intertwined, forming the rise and fall of Bitcoin prices. For example, the surge in Bitcoin prices in 2017 was due to the market's enthusiasm for blockchain technology at the time, coupled with extensive media coverage, which led to investors pouring into this market and driving the rapid rise in prices.

In 2018, the price of Bitcoin experienced a painful decline. Many investors began to reflect on what caused such drastic fluctuations? A thorough investigation of the cause found that there was a lot of speculation in the market at the time, and many investors did not conduct in-depth analysis of the fundamentals of Bitcoin. Coupled with the gradual tightening of regulatory policies, market confidence was hit, which eventually led to a sharp decline in Bitcoin prices.

When analyzing the rise and fall of Bitcoin, technical analysis tools are particularly important. Many professional traders use technical indicators such as charts, trend lines, and moving averages to judge the market trend. For example, MACD (moving average convergence divergence indicator) and RSI (relative strength index) are technical analysis tools widely used in Bitcoin trading. Through the analysis of these indicators, investors can better grasp the buying and selling opportunities in the market.

In addition to technical analysis, market sentiment also plays an important role in the fluctuation of Bitcoin prices. According to the "Fear and Greed Index", when market sentiment is too greedy, it often means that the high point of the price is coming, and vice versa. In 2019, when the price of Bitcoin rose to $10,000 again, market sentiment almost reached its peak, and many novice investors entered the market, but the price fell back soon after. This emotion-driven fluctuation allows us to see the irrational side of the market.

In addition, changes in policies and regulations are also important factors affecting the rise and fall of Bitcoin. For example, China's regulatory policies on ICOs (initial coin offerings) and virtual currency exchanges in 2017 caused the market to lose confidence instantly, leading to a sharp drop in Bitcoin prices. In 2020, as the regulatory policies of the United States and other countries on Bitcoin and its related assets were gradually relaxed, market confidence was restored, and Bitcoin prices rebounded again.

Furthermore, changes in the macroeconomic environment also have a profound impact on Bitcoin prices. The outbreak of the new coronavirus in 2020 caused a severe blow to the global economy, and many investors began to seek safe-haven assets. At this time, Bitcoin's attributes as a "digital gold" were gradually recognized, attracting a large amount of capital inflows and driving up prices. Against this background, many institutional investors began to include Bitcoin in their investment portfolios, further enhancing its market position.

It is worth noting that Bitcoin's supply mechanism also affects its price fluctuations to a certain extent. The total amount of Bitcoin is limited to 21 million, and this scarcity gives it a certain value-preserving attribute. The halving event every four years, that is, the halving of the Bitcoin reward received by miners for mining, will also have a huge impact on the market. For example, after the halving event in 2020, the price of Bitcoin began to rise gradually. Similar to the halving events in history, the market generally expects that the price will rise further in the future.

In the future, the rise and fall of Bitcoin may be affected by more emerging technologies. With the rise of DeFi (decentralized finance) and NFT (non-fungible tokens), the Bitcoin ecosystem is expanding. Such changes not only bring new application scenarios to Bitcoin, but may also complicate the law of its price fluctuations. For example, as more financial products are linked to Bitcoin, the liquidity of the market will increase, and price fluctuations may be more intense in the short term.

At the same time, global economic uncertainty will continue to affect the trend of Bitcoin. Whether it is geopolitical tensions or changes in economic policies, it may cause investor sentiment to fluctuate, thereby affecting the price of Bitcoin. In 2021, as global inflation intensifies, more and more investors regard Bitcoin as a tool to fight inflation, and this trend may deepen in the future.

In this uncertain market, as investors, we need to have higher sensitivity and analytical ability. Through in-depth research on the law of Bitcoin's rise and fall, we can better grasp the market dynamics and achieve more effective asset allocation. Especially in the face of a rapidly changing market environment, it is particularly important to respond flexibly and adjust investment strategies in a timely manner.

In short, the rise and fall of Bitcoin is a complex system involving the interaction of multiple factors. Understanding these laws requires not only a keen insight into the market, but also in-depth research on macroeconomics, policies and regulations, technical analysis and other aspects. Only in this way can we find our own investment strategy and obtain more generous returns in this digital currency market full of opportunities and challenges. The future Bitcoin market will be more diversified and complex. We hope that every investor can find their own direction in this blue ocean and achieve wealth growth.

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.

Many people may want to get the answer to the question of how investors in the currency circle view the law of Bitcoin's rise and fall. After all, only by understanding the law of Bitcoin's rise and fall can we better invest in Bitcoin.

 How to see whether Bitcoin has risen or fallen

First of all, to see the rise and fall of Bitcoin, we must look at the trend of the Yin-Yang line on the chart. If the Yang line is rising, it means rising, and the Yin line 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 do not 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 to the development 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.

 What is related to the rise and fall of Bitcoin?

1. Bitcoin supply shrinks

We all know that every time Bitcoin production is reduced, Bitcoin will have a sharp 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 still been several technical crises. For example, Bitfinex, the largest Bitcoin 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.

This is us. Some of these 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 sell their chips, or even sell them at a high price. If there are more bullish people, the market will rise, because everyone will exchange their capital for chips and wait for the rise. These 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