In today's digital currency market, Bitcoin has always attracted much attention, and its price fluctuations have triggered widespread discussion and speculation. There are many factors that affect the rise and fall of Bitcoin prices. In addition to the market supply and demand relationship, there are also many complex internal and external factors. Let's explore in depth and reveal the inside story of Bitcoin price fluctuations.

The fluctuation of Bitcoin prices is affected by many factors. First of all, the market supply and demand relationship is one of the most basic and direct influencing factors. When market demand increases, Bitcoin prices usually rise; conversely, a decrease in market demand will lead to a drop in prices. For example, when Bitcoin is widely used to purchase goods and services, demand increases and prices will rise accordingly. This change in supply and demand often causes sharp price fluctuations in the short term.

In addition, macroeconomic factors also have an important impact on Bitcoin prices. Factors such as the global economic situation, monetary policy, and geopolitical risks may all have an impact on Bitcoin prices. For example, when the global economy is unstable, investors will seek safe-haven assets, leading to an increase in the prices of digital currencies such as Bitcoin. And the adjustment of some national policies, such as prohibiting or encouraging digital currency transactions, will also directly affect the fluctuation of Bitcoin prices.

Technical factors are also one of the important factors affecting Bitcoin prices. Changes in technical indicators such as Bitcoin mining difficulty, transaction speed, and network security may affect investors' confidence in Bitcoin, and thus affect price trends. For example, the exposure of security vulnerabilities in the Bitcoin network or the adjustment of mining difficulty may trigger panic among investors and lead to a sharp drop in prices.

Social psychological factors also influence the fluctuation of Bitcoin prices to a certain extent. Investors' emotional fluctuations, market hype, media publicity, etc. may all have an impact on Bitcoin prices. For example, the remarks, rumors or hype of certain celebrities often cause market fluctuations in a short period of time, which in turn affects the rise and fall of Bitcoin prices.

In addition to the factors mentioned above, factors such as laws and regulations, market supervision, and technological innovation also affect the fluctuation of Bitcoin prices to varying degrees. Overall, the rise and fall of Bitcoin prices is a complex complex, which is formed by the combined action of multiple factors.

In summary, the fluctuation of Bitcoin prices is affected by multiple factors, covering market supply and demand, macroeconomics, technical indicators, social psychology and other aspects. When trading Bitcoin, investors need to fully consider the impact of these factors and make rational decisions. At the same time, regulatory authorities and market institutions should also strengthen supervision, guide the healthy development of the market, and ensure the stable operation of the digital currency market. As an emerging digital asset, the price fluctuations of Bitcoin will continue to be affected by multiple factors. Investors need to remain cautious and invest rationally in order to be invincible in the market.

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.

From the daily price changes of Bitcoin, the amplitude exceeds 10% from time to time, and even the price drops by more than half in two weeks. This article hopes to find the reasons for the sharp changes in Bitcoin prices in a short period of time through the changes in Bitcoin prices in the past two years, combined with the news at that time.

1. Overall trend

January 2017 to April 2018

It can be seen that from January 2017, Bitcoin experienced an amazing rise, and then fell sharply at the end of 2017. We will select several time periods with large changes.

2. Recent decline

The last week of March 2018

The price of Bitcoin fell from a high of $8,500 to a low of $6,550, a weekly drop of 23%.

Looking for the news of the week, we found that there were many negative news in the virtual digital currency market that week. For example, on March 27, Reuters reported that Twitter would join Facebook and Google in banning ICO and cryptocurrency advertising on its social media platform. For example, on March 29, my country's central bank held a national video and telephone conference on currency, gold and silver. Fan Yifei, deputy governor of the central bank, said that it is necessary to carry out rectification and cleanup of various virtual currencies, closely communicate and cooperate with relevant departments, and vigorously rectify the chaos in the field of cash circulation.

3. Short-term rise

February 14, 2018-February 28, 2018

In just two weeks, the price of Bitcoin rose from a low of US$8,505 to a high of US$11,065, an increase of 30%.

The reason for this rise is mainly the enthusiasm of investors and investment institutions. On the one hand, the high price of Bitcoin of about US$19,000 last year made investors think that it was time to buy at the bottom. On the other hand, the attitude of regulators in various countries was unclear. In February, the sharp drop in global stock markets made investors more demanding of Bitcoin. Finally, the concept of blockchain became popular, and Bitcoin, as the earliest application of blockchain, was also sought after by the market.

4. Policy pressure

January 8, 2018 - January 12, 2018

The highest intraday price was $16,300, and the lowest price fell to $12,807, a drop of 21.4%.

The news this week mainly came from South Korea. On January 8, the chairman of the Financial Services Commission of South Korea stated at a press conference that they were conducting a joint inspection with the Financial Supervisory Service of South Korea on six banks that provide cryptocurrency account services to verify the implementation of the anti-money laundering regulations previously formulated and the real-name system measures for related accounts. On January 11, according to foreign media reports, the South Korean Ministry of Justice was preparing legislation to pave the way for the complete closure of domestic exchanges.

5. Crazy 2017

From the end of September 2017 to the end of the year

The price of Bitcoin soared to $19,000 at this stage, and then fell to about $13,000, with the maximum increase of 3,750%, and the subsequent decline in the next half month also reached 32%.

Overall, first of all, in 2017, the public's awareness of Bitcoin has been comprehensively improved, and many institutional investors and retail investors have entered the digital currency market, especially the Chinese market. In January 2017, China's trading volume far exceeded that of other countries, accounting for about 80% of the world. Although on October 31, digital currency trading completely withdrew from the Chinese market, the Chicago Mercantile Exchange announced the launch of Bitcoin futures on the same day. On December 11, Bitcoin futures were officially launched, and then they were popular among investors, triggering three circuit breakers.

In the birthplace of Bitcoin, with the rise of Trump and unclear policy orientation, digital currency has become a safe haven option for American investors. Japan officially recognized the legal status of Bitcoin in April this year, and Japanese investors also rushed into the Bitcoin trading market crazily.

6. Summary

From the above examples, we can see that there are many factors that can affect the price of Bitcoin, which can be summarized as follows:

1. Investment supply and demand factors
This factor is actually not independent. Investors' demand for Bitcoin is actually affected by multiple news factors. However, judging from the sharp rise in prices in 2017, in the absence of obvious policy news, the entry of investors and investment institutions will also drive price growth.

2. Policy factors, which are also important factors affecting Bitcoin prices. In the above examples, the implementation and formulation of policies in South Korea, Japan, the United States, and China have all affected the trend of Bitcoin prices.

3. Real financial factors
The instability of the real financial world has caused the demand for digital currencies to rise from time to time. For example, the default of the Central Bank of Cyprus, Brexit, and the setback of global stock markets in early 2018 have all brought Bitcoin's risk-averse characteristics into play.

4. Technical factors
Although the security of Bitcoin has been highly praised in its development, there have been several technical crises in its development history. 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.

In summary
The author believes that Bitcoin, as a digital currency that can be traded globally, is also affected by many factors, resulting in a large range of price fluctuations. For investors, a stronger risk tolerance is required. Before investing, investors should not blindly follow the trend to prevent large losses.