Hey all
This has been a question bugging my head for a while now, and with the $3k mark that we recently hit and the drop to $2.5k.
How does BTC gain or lose value? And how does BTC 'pop', like lose 500 USD worth over a day?
The price of Bitcoin resides on the demand and supply. As based from the law of supply and demand, if the demand is high/low with respect to the total supply available in the market, then the price will increase/decrease respectively. So the current decline we are seeing these past days may be due to some people selling their coins just to get some profits.
Let us put it this way,
Price increase:You want to buy............................+Demand
You bought some coins... ...............-Supply
I want to buy................................+Demand
I bought some coins.......................-Supply
Price decrease:You sold some coins.......................+Supply (Constant Demand)
I sold some coins...........................+Supply (Constant Demand)