#BTC# The rise and fall logic of the Crypto Assets market

Policy Regulation:
The policy environment directly affects the market legality and capital flow of Crypto Assets. For example, China's comprehensive ban on Crypto Assets in 2021 caused the price of Bitcoin to plummet by 30% in an instant; while in the United States, the approval of the Bitcoin ETF led to a surge in price by 20%.
Institutional Entry:
Institutional funds are massive, pushing prices up when buying and triggering a sell-off when dumping. For example, Tesla bought $1.5 billion in Bitcoin in 2021, driving the coin price above $60,000; MicroStrategy has been continuously hoarding coins, humorously referred to as the "Bitcoin savings jar."
Technological Innovation:
Technological innovation is an important driving force behind the rise in Crypto Assets prices. For example, Ethereum upgraded to the POS mechanism, and the price rose 50% three months in advance; the Solana network experienced 10 outages, causing the coin price to halve.
Macroeconomics:
During an economic crisis, Bitcoin may transform into "digital gold"; when the US dollar strengthens, funds flow back to traditional markets. For example, the Federal Reserve's interest rate hike led to a fall in risk assets, with Bitcoin dropping below $20,000; when the Russia-Ukraine war broke out, Bitcoin surged 15% in a single day.
Market sentiment:
Reduce positions when market sentiment is extremely euphoric, and buy at the bottom when the market is desperate. For example, when Musk said, "Dogecoin is the people's currency," Doge surged 10 times; after the Luna crash, the "fear index" skyrocketed, and retail investors cut their losses and left the market.
Supply and demand changes:
Constant total supply + increasing demand = long-term rise; unlimited issuance + declining popularity = warning of zero. For example, after the Bitcoin halving events, the increase in price has historically exceeded 500% in the first three halvings; a large number of new coins listed on exchanges → oversupply → price plummeting.
Black Swan Event:
Sudden incidents instantly destroy market confidence, triggering a chain reaction. For example, the FTX exchange collapse led to the downfall of the entire market; North Korean hackers stole 600 million in Crypto Assets, triggering a wave of sell-offs.
These factors work together to cause severe fluctuations in the prices of Crypto Assets. Investors need to closely monitor changes in these factors to better grasp market trends.