Why does Bitcoin's price change so much?

[Mimideboy]

I’m still learning about Bitcoin and one thing i am  trying to understand better is how supply and demand affect its price From what I understand when more people want to buy Bitcoin than sell it the increased demand can push the price higher On the other hand when more people are trying to sell than buy the price can go down

Bitcoin is also different because its total supply is limited to 21 million coins This makes me wonder how limited supply affects Bitcoin’s value when demand continues to change For example if more people and businesses start wanting to own Bitcoin in the future could the limited supply have a significant effect on its price?

I would really like to hear from more experienced Bitcoin users How important do you think supply and demand are when it comes to Bitcoin’s price? Are there other factors that you think beginners should pay attention to when trying to understand Bitcoin price movements?

[PostQuantumBTC]

I’m still learning about Bitcoin and one thing i am  trying to understand better is how supply and demand affect its price From what I understand when more people want to buy Bitcoin than sell it the increased demand can push the price higher On the other hand when more people are trying to sell than buy the price can go down

Yes this is true.

Bitcoin is also different because its total supply is limited to 21 million coins This makes me wonder how limited supply affects Bitcoin’s value when demand continues to change For example if more people and businesses start wanting to own Bitcoin in the future could the limited supply have a significant effect on its price?

Bitcoin limited supply is already having effect on the price of bitcoin since it was created. More supply means the price will be lower than what it is today. Yes as more people and businesses are buying bitcoin, the price of bitcoin will increase.

I would really like to hear from more experienced Bitcoin users How important do you think supply and demand are when it comes to Bitcoin’s price? Are there other factors that you think beginners should pay attention to when trying to understand Bitcoin price movements?

If you want to know more about bitcoin price movements, you need to know about fundamental analysis. Technical analysis can also help.

Trading is very risky, but you can learn about the fundamental and technical analyses and not trade.

[SDS11]

I’m still learning about Bitcoin and one thing i am  trying to understand better is how supply and demand affect its price From what I understand when more people want to buy Bitcoin than sell it the increased demand can push the price higher On the other hand when more people are trying to sell than buy the price can go down

Bitcoin is also different because its total supply is limited to 21 million coins This makes me wonder how limited supply affects Bitcoin’s value when demand continues to change For example if more people and businesses start wanting to own Bitcoin in the future could the limited supply have a significant effect on its price?

I would really like to hear from more experienced Bitcoin users How important do you think supply and demand are when it comes to Bitcoin’s price? Are there other factors that you think beginners should pay attention to when trying to understand Bitcoin price movements?

You’re understanding it right and that’s the core of how bitcoins works it’s volatile. You have to understand the movement of the analysis, supply can’t expand to meet demand quickly even a small rush of buyers or sellers can move the price a lot.

[Mate2237]

There are lots of things that affects the movement or price of Bitcoin, there are times when the market seems like it's going into a certain direction that's unfavorable this makes holders start selling their coins and it leads a downward pressure, this is what influences or increases the dip. There is a little bit of psychological or emotional factors in this because start buying probably because they predict an increase Bitcoin begins to move in that upward direction.


Two major things that influences or causes price changes for in Bitcoin are buying and selling, You cannot compare the number of people that invest in Bitcoin during a decline and those that decide to sell, the margin of people selling their coins is quite high. Another factor that causes the price to change are economical factors or conditions.

[Frankolala]

It all boils down to demand and supply. There are a lot of factors that can lead to increase in demand of bitcoin and decrease in demand which are investors sentiment. Good news on bitcoin from the US can trigger the price to pump because investors will buy at that time and bad news can make the market dip. However, any news that affects bitcoin price positively or negatively will definitely be for short term. The lunch of bitcoin ETFs in 2024, triggered more buyers and that made bitcoin price to reach a new ATH for the first time in history before the halving.

[Judith87403]

I would really like to hear from more experienced Bitcoin users How important do you think supply and demand are when it comes to Bitcoin’s price? Are there other factors that you think beginners should pay attention to when trying to understand Bitcoin price movements?

Demand and supply is what causes market volatility because as some investors are buying bitcoin that is how other investors are selling their bitcoins and that is what causes the price of bitcoin to fluctuate upwards and downwards all the time. Bitcoin is not a stablecoin that no matter the rate of buying and selling, they don't experience any volatility. The reason why stable coins are not volatile is because their value is connected to traditional fiat currencies unlike bitcoin that get its value from scarcity because of its limited supply, and also the security of the Blockchain since it cannot be tampered with.

[gracreavix]

The thing that makes Bitcoin today is the value people see in it. If Bitcoin like, let it have all the security in the whole world, have limited supply, that doesn't really concern people like that. But the strength of Bitcoin is the value people perceive from it. That's it. When that value is not there, the price of Bitcoin will fall to zero. Bitcoin has all it's juice. Yes. But value perceived from people is what keeps Bitcoin standing strong.

[Shadiq]

The direct cause of Bitcoin price volatility is demand and supply. We all know that Bitcoin has a fixed supply, with every halving, the supply decreases, there is no external influence on it. But demand changes regularly, this instability of demand is the reason for instability in the Bitcoin market.

There are various reasons for demand changes. Large-scale crypto fraud or hack, inflation, political instability, economic instability and central positive or negative news are some of the main reasons for changes in people's demand. It is based on demand and supply that we see market instability, decline, dip, pump or bull season or ATH.

[CryptoHeadlineNews]

I’m still learning about Bitcoin and one thing i am  trying to understand better is how supply and demand affect its price From what I understand when more people want to buy Bitcoin than sell it the increased demand can push the price higher On the other hand when more people are trying to sell than buy the price can go down

Bitcoin is also different because its total supply is limited to 21 million coins This makes me wonder how limited supply affects Bitcoin’s value when demand continues to change For example if more people and businesses start wanting to own Bitcoin in the future could the limited supply have a significant effect on its price?

How Bitcoin works is not far from the principle of demand and supply, and the more the demand for it increases, the more it's market value will also increases also, since it already has a limited supply. Unlike if it's supply was unlimited, it wouldn't have gotten any value as demand increases. So the more Bitcoin remains a limited digital currency,  and the demand for it increases rapidly, a will this positively affect the price of Bitcoin to also increase too. So that's the correlation Bitcoin has with demand and supply.

[Lembo69]

Bitcoin is a digital currency, so its price constantly fluctuates based on buying and selling pressure. Those familiar with the Bitcoin market are never worried about these ups and downs; such volatility is a natural characteristic of the market. Another notable aspect is that when the market is bullish, many investors sell off their holdings, causing price fluctuations. The fact that supply is limited relative to demand also contributes to this price volatility. While the number of Bitcoin investors has steadily increased since 2009, the total supply of Bitcoin does not grow. As public demand for Bitcoin rises, the price experiences even greater volatility.

[Cryptomultiplier]

One thing you must understand about Bitcoin is that it ain't like fiat where more currency can be printed because its supply is fixed even when new investors come onboard.
So when the demand for BTC increases the only thing that can change is the price and that's what makes demand and supply the core structure of Bitcoin price flow.
Other things I think that also influence the price of BTC is the holding habits of investors, the global cash flow and trading leverage on the market.

[Btcdeybodi]

Bitcoin is also different because its total supply is limited to 21 million coins This makes me wonder how limited supply affects Bitcoin’s value when demand continues to change For example if more people and businesses start wanting to own Bitcoin in the future could the limited supply have a significant effect on its price?

Limited supply impacts bitcoins value because after every halving event, there is always a reduction in the numbers of new coins that are being mined which creates more scarcity hence more value will be added. The reason why bitcoin is capped at 21 Million Bitcoins and subjected to be completely mined in the year 2140 is to avoid excessive mining of bitcoin because if bitcoin is mined excessively it will lose its value because it will not have any purchasing power anymore.

Let's take for instance, the reason why the fiat currency doesn't have purchasing value is because of excessive printing which causes over circulation and results in inflation because when people have a lot of money in their possession they will tend to spend more and when people have enough money to spend, the prices of goods and services will skyrocket as a result of high demand.

But because bitcoin is not like the fiat currency that is being printed in excess, that is what gives it value because there is not enough of it that is mined every halving, so its scarcity remains intact while the mining target still remains the 21 million Bitcoins which will take about 114 years to achieve.

[Proty]

When learning about market trends , the most important thing that someone needs to understand is supply and demand. The fact  that bitcoin is limited in supply is  important, which we have about 21milion bitcoin in supply . But this reason alone won't make the price to rise or increase without an increase in demand. For instance if there is an increase in the population of people that is holding bitcoin this will influence the price to go up even with the limited supply.
However, there are also things that needs to be put into consideration such as market sentiment, liquidity and how people react to market trends within a period of time.
As for me, I think beginners should focus more on how supply and demand works with markets trends than to focus on the 21 million supply.