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

Regulatory Policy:
The policy environment directly affects the market legitimacy and capital flow of Crypto Assets. For example, China's comprehensive ban on Crypto Assets in 2021 led to a sudden fall of 30% in Bitcoin prices; while in the United States, the approval of the Bitcoin ETF resulted in a 20% rise in prices.
Institutional Entry:
Institutional funds are vast in size, pushing up prices when buying and triggering sell-offs during dumps. For example, Tesla bought $1.5 billion in Bitcoin in 2021, driving the coin price above $60,000; MicroStrategy has been continuously hoarding coins, earning the nickname "Bitcoin piggy bank."
Technological Innovation:
Technological innovation is an important driving force behind the rise in Crypto Assets prices. For example, Ethereum's upgrade to the POS mechanism saw its price rise by 50% three months in advance; the Solana network experienced 10 outages, causing the coin price to plummet.
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 hikes lead to a sharp fall in risk assets, with Bitcoin dropping below $20,000; the outbreak of the Russia-Ukraine war results in a single-day rise of 15% for Bitcoin.
Market Sentiment:
Reduce positions when market sentiment is extremely enthusiastic, and buy the dip when the market is in despair. For example, when Musk said, "Dogecoin is the people's currency," Doge surged 10 times; after the collapse of Luna, the "fear index" soared, and retail investors cut their losses and exited.
Supply and demand changes:
Constant supply + increasing demand = long-term rise; unlimited issuance + declining popularity = zero warning. For example, the Bitcoin halving event, where the price increase after the first three halvings historically exceeded 500%; a large number of new coins being listed on exchanges → oversupply → price plummets.
Black Swan Event:
Sudden events instantly destroy market confidence, triggering a chain reaction. For example, the FTX exchange collapse brought down the entire market; North Korean hackers stole $600 million in Crypto Assets, triggering a wave of sell-offs.
These factors work together to cause the dramatic fluctuations in Crypto Assets prices. Investors need to closely monitor changes in these factors to better grasp market trends. #ETH