How Cryptocurrency rates especially BTC Fluctuate so quickly?

[Wexnident]

Supply and demand. Price mainly fluctuates due to how volatile it is right now, but a middle point should be achieved in the future since supply is still currently increasing. There are a lot of speculations out there, and mainly due to the idea of Bitcoin being an investment, it resulted in fluctuations in the price, especially during times where speculations and the like spike up, whether it be positive or negative news, as long as it's news about price speculation, it would always affect it one way or another.

Also due to the decentralized system of BTC, it can't really be affected by any centralized government, even if they tried to. Even if BTC has no backing, it is because of such that no one can really touch on how the market moves and would solely rely on supply and demand.

[1715470621]

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[Hypnosis00]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

I am not sure what rates you are pointing out. I assume that you are asking for a price rate that could be our basis in buying or selling.
Since Bitcoin price is not controlled, it was you as a buyer or seller to decide what would be your rate. Why whales could affect the price is that because when they dump, the price drops as well or in the opposite way. Then we are saying there is market manipulation in crypto. Have to believe that instances? Maybe we should.

[Anna138]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

As in a normal financial market, the price depends on the events (political, economic, social, and technological) taking place in the world. For example, if a war with America begins in Iraq, then we should clearly expect a movement in the dollar in the near future. Or for example, the coronavirus has hit the financial sector very hard.

[kryptqnick]

Its pretty easy to be whale in crypto, whales could manipulate price as they want. Also, a lot of fomo and fud here, that's affect the price too

How on earth it is pretty easy to become a whale in crypto? I would like to know!

Whales are definitely there but they are not the only reason why bitcoin price fluctuates. It's just one of the many reasons out there! What fluctuation you see, is one of the rawest form of human emotion without any centralized authority to step in.

FUDs usually play a role but it's super temporary unless that FUD comes from any world leader or someone supremely powerful.

I agree that it's not easy when we talk about Bitcoin (I believe it's next to impossible and that 'whale manipulations' talks are more like conspiracy theories). However, this person said 'in crypto' and there are tons of shitty altcoins that can be manipulated with relatively low amounts of money, so I guess it counts as being a whale (relatively, of course).
And I agree with tulpe123 that FOMO and FUD play a massive role in price formation. Sure, it's demand and supply in theory, but often the demand varies greatly due to some speculations or mildly related to Bitcoin events that trigger certain attitudes (sometimes positive, but usually negative), and that, in turn, leads to a significant temporary change of price.

[wxa7115]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

This is economics 101, the price of everything depends on the supply and demand, however while that explains why the price of bitcoin changes and how its price is decided it doesn't explain, at least in an explicit manner, why the price of bitcoin moves so quickly, there are several reasons for that one of the most obvious is that despite the size of this market it is still very small compared to many other markets and as such it is easier to move it compared to them.

Another reason is that there is a great concentration of wealth in a few individuals which we call whales and as such they can move the price with their actions, finally the limited supply of bitcoin plays a huge factor because as soon as the demand skyrockets the supply stays the same and that obviously makes the price of bitcoin to go up very rapidly.

[Sanugarid]

I mean is there any system on which there rates are decided? If so, what is it?

Well, mainly, eversince, the supply of bitcoin/cryptocurrency, and the market demand. Exchanges have a huge factor of it - the price and volume.

Yea it really depends on the supply and demand. Bitcoin price does vary on exchanges coz every exchanges has their own volume, you might notice that bitcoin price in some country is not the same as your exchange price, and there you'll realize that the huge factor of the price is the demand.
The demand is coming from different direction but most are being concentrated to the whales.

Now you might wonder why there is a demand for a digital coin like bitcoin, that's for another topic to discuss.

[Twentyonepaylots]

What drives the demand up high is the decentralization, coz many people wants to be pseudonymous when transacting online and it happened to be found in bitcoin. Another thing is from speculation, when people speculates it creates demand in some point but it's not always going high. So if you are asking why the price of bitcoin is rapidly going up and down, that's basically because of the mass speculation.

[Zionatin]

It is pretty much about the maximum capital. Crypto is still new so a whale can change and manipulate the price alone. Fiat is so widely used it cannot be manipulated so easily. As crypto grows and is divided more and more among more people it will become harder and harder to manipulate. The more they spread the harder to manipulate. This is why new projects are often a good idea to take part in because you can become a whale with greater ease.

[Asuspawer09]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

Bitcoin marketprice is decided in supply and demand in the market, if you're familiar in exchanges you could clearly see the buying and selling section, it is not controlled by bots or code, etc. but it depends in the investors that are buying and selling bitcoin in the exchange, When a lot of investors selling their bitcoin in the market it is going to result to a drop in the market price in bitcoin, also when a lot of people buying or investing in the bitcoin market price is going to increase or pump. The demand is going to increase when no one wanted to sell their bitcoin in the exchanger, that just means in the buying section it would be in a higher price because people would want to buy bitcoin it needed to increase their buying price if they wanted to buy, if you set the buying price at a low market price it will be placed last in the buying section. Also in the selling section in the exchange, if you want to sell your bitcoin and set it at a certain price you need to wait for a buyer, other selling is going to sell their bitcoin lower than the price you set decreasing the market price.

[mk4]

It is pretty much about the maximum capital. Crypto is still new so a whale can change and manipulate the price alone. Fiat is so widely used it cannot be manipulated so easily.

You meant traditional high-cap investments/assets not fiat, right? Because if you really think that fiat cannot be manipulated so easily, the Federal Reserve's Jerome Powell would like to have a word with you.

[CryptopreneurBrainboss]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

Just think of it as the price each trader is willing to buy or sell the coins on the exchange because that's exactly what it's. Buyer A might want to buy at a certain price but will later change his mind the movement he see a downward trend of the price same in the case of the seller, when the market begin to show positive signs of upward movement, the sellers immediate cancel his order so as to sell higher than the initial amount.

This are done by active traders but mostly bots which is why if you didn't keep your emotional understand control while trading, you can easily get decieved by the movement of the market.

[davis196]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

The "system" is basically all the buy/sell orders aggregated from the crypto exchange platforms,which are tracked 24/7.The rates are decided by the supply and demand.
If the sell orders are more than the buy orders,the price goes down and vice versa.
And it's not just the crypto market that works like that.The stocks and forex markets work exactly the same way. How difficult is to understand something so simple?

[tbct_mt2]

I always wonder How Cryptocurrency rates especially BTC Fluctuate so quickly? I mean is there any system on which there rates are decided? If so, what is it?

Because there are no limits of changes within a day like stock market. There is no circuit breaker for the market to stop panic. Crypto market now is a free one, free of limits, free of circuit breakers. Price can move up or down without any limits.

Price in turn changes fastly because of price manipulation and news. People invest in crypto but most of them don't know what is bitcoin, and what are waiting for them in crypto market. Then when bad news come they panicly sell and good news release they buy with joy of FOMO. They should do opposite as the saying goes "Buy the rumors, sell the news".

[Pffrt]

Rates are decided by the traders. At which price traders buy or sell = the current price of bitcoin. The reason behind fluactuations are speculation of the traders. If majority of the traders think BTC will go down, they start selling and so does some others do. As a result, the price decreases a lot and vice versa.

[Twinkledoe]

Rates are decided by the traders. At which price traders buy or sell = the current price of bitcoin. The reason behind fluactuations are speculation of the traders. If majority of the traders think BTC will go down, they start selling and so does some others do. As a result, the price decreases a lot and vice versa.

And with that, there is no system governing those fluctuations. As the OP is asking about system about such market trend. Market performance depends on various factors, and how traders react to certain situations will play a great role on how the trading market behaves. The movement is fast in crypto that's why it is called a volatile investment. If you are not ready to face this, better keep yourself in the stablecoin market for now.

[Viscore]

I'd never see there is a system that controls the market price. we are still in the decentralized market and all the buying and selling price will always depend on us. If I sell my cryptos or even buy it today below the market price it is my choice but we can't simply think that it will be filled easily if the price trend going high.

If the majority are pushing the market high, it makes to follow and the same thing happens if they push it back down. We can say it was manipulation, not really sure but the market behaviors are truly affected when there is a huge buy and sell difference.

[junnar1968]

Like all things that have a finite supply, the value of a bitcoin is derived by the number of people that want to buy them vs the number of people that want to sell them.
 
If more people want to buy bitcoins than are currently for sale (for example if a surge of people want to start using bitcoins to transfer value across borders, see more on this below) then the price goes up.
 
If more people want to sell bitcoins than currently want to buy them then the price goes down.

[coolcoinz]

Rates are decided by the traders. At which price traders buy or sell = the current price of bitcoin. The reason behind fluactuations are speculation of the traders. If majority of the traders think BTC will go down, they start selling and so does some others do. As a result, the price decreases a lot and vice versa.

That's right, which makes it an imperfect indicator, because the supply available on exchanges is a fraction of the total supply. In other words, the price of ~17 million coins is decided on trades performed upon a million or two that are available for trade around the world. The system is still fair, because it's assumed that if the exchanges were to run out of available supply, the price would skyrocket so much that people who don't hold their coins on exchanges would move them to take advantage of the event, but in the meantime we'd all experience extreme volatility. What you could see in March of this year was an example of what could happen and how easy it is to deplete bitcoin exchanges.

[bonjouros]

There are many factors why the bitcoin price fluctuates so quickly. First, a big dump from a whale meaning there is a massive selling order and the buying order can't keep up that is why the price of bitcoin will crash easily once it will happen. BTC price is base on demand and supply also.

The holders are what pushing the price upward, meaning those who buy and never sold their bitcoin are the one who increases the demand and once it happen the bitcoin price will continue to increase  as the supply was overtaken by demand. Traders have big roles also in bitcoin price as they can also affect the prices of bitcoin but the main character that are causing the bitcoin price to fall or increase easily are the big whales.

[AjithBtc]

The market is manipulative, when a huge volume gets accumulated with a user he/she has got the ability to move the market. Most of the time, the whales unite together to make changes to the market according to their need. This manipulation is possible to certain point, because compared to the total volume into circulation what Whales have will be a part.

Next thing is the demand to the supply, here exchanges play a very big role. Each trade and the volume constitute to the market fluctuation happening with time.