Why does Bitcoin rise and fall (Why does Bitcoin continue to rise)?

Why does Bitcoin rise and fall? This is because after a period of fluctuations, people have some misunderstandings about the price of Bitcoin. So the question is, why does Bitcoin rise and fall? What are the reasons?

First, it is important to understand why many investors have not noticed the continuous rise and fall of Bitcoin prices. Secondly, many people do not know what actually happened to Bitcoin.

Therefore, whether you are buying or selling Bitcoin, you need to be cautious, especially when the market starts to become turbulent (such as in May). This situation is very common, especially in recent months, due to various stimulating news, causing the price of Bitcoin to experience a decline.

In fact, let’s first take a look at what is a bull market for Bitcoin and its correlation with other assets.

From the above graph, we can see that:

The historical increase in Bitcoin mainly comes from three aspects – the increase over one year, two years, and three years. The long-term investment value of Bitcoin mainly lies in its appreciation. Bitcoin can be considered as a currency because it has a property of being a digital commodity. However, Bitcoin itself is not a legal currency like gold but rather a speculative asset represented by cryptocurrencies such as Ethereum and Ripple. Therefore, the price of Bitcoin is determined by supply and demand. If there is an oversupply, the price will decline or depreciate. But this is not a bad phenomenon, at least from a historical perspective, these are normal development trends. As long as Bitcoin can maintain its upward trend, it can continue. Therefore, whether Bitcoin will continue to rise all the way or even experience a surge, it will not be affected.

Of course, there is another factor worth noting, that is, before the Bitcoin halving in 2013, Bitcoin had not reached its historical high and continued to grow, reaching an unprecedented state. That means at that time, the entire Bitcoin market had not undergone major changes. Bitcoin is currently in a bear market, and even in early 2017, it has not reached its historical low, yet it still maintains a considerable trading volume and broke through new highs in early December 2019, and has been slowly climbing since then. Starting from late November 2018, BTC returned to a position above $20,000, currently surpassing $3,000, only a few cents away from its historical high, which also became the biggest news event for Bitcoin this year.

Why does Bitcoin continue to rise?

According to Bitcoin.com, Bitcoin has risen nearly 70% since March 12. With the rise in price and increasing interest from investors in cryptocurrencies, many analysts believe that Bitcoin will reach higher price targets. Here are the reasons why Bitcoin continues to rise: 1. The influx of institutional funds into the market has led to a surge in demand for Bitcoin as a store of value; 2. Bitcoin trading volume has been on the rise in recent weeks and continues to grow; 3. Over the past few weeks, the open interest in the Bitcoin futures market has increased by over $200 million, reaching a historic high and growing by 60% compared to the previous week; 4. More than 50 new blockchain projects have been launched in the first quarter of this year; 5. The selling pressure on the market has reduced recently, and some altcoins have started to decline; 6. Gary Gensler, the chairman of the U.S. SEC, has stated that if digital assets are to become a legitimate payment method, regulation is needed, which will bring tremendous benefits to people.