Deep Dive into the Cryptocurrency Market: Uncovering the Financial Logic Behind Price Fluctuations

The cryptocurrency price chart you see is actually a trajectory formed by the latest transaction prices connected minute by minute. The drawing of this trajectory is not directly related to trading volume. This rule applies not only to the cryptocurrency market but also to various markets such as commodities futures, foreign exchange, and real estate.

Behind every transaction, buying and selling are always intertwined and interdependent. Because any transaction must accompany a buyer's bid and a seller's acceptance.

So, how does the price of cryptocurrencies actually rise? The answer is simple yet profound—supply does not meet demand.

You might feel confused; since buying and selling are always equal at each transaction, how can the price rise?

Let me explain with a vivid example: Suppose a certain cryptocurrency is currently trading at 10 yuan, and there are 10 investors willing to buy at this price, but only 9 are willing to sell. After these 9 transactions are completed, there is still 1 investor who has not been able to buy the desired cryptocurrency.

To complete the transaction, this investor must raise their bid and look for sellers at higher price levels. For instance, they choose to raise their bid to 10.1 yuan and are fortunate enough to find a seller willing to sell at this price. Thus, the latest transaction price is set at 10.1 yuan, and we witness the moment the cryptocurrency price rises from 10 yuan to 10.1 yuan.

If the price of 10.1 yuan still fails to meet market demand, this investor may have to continue raising their bid, seeking trading opportunities at 10.2 yuan or even higher. Therefore, every increase in the cryptocurrency price directly reflects the market's supply-demand imbalance.

In this vast ocean of financial markets, every subtle fluctuation contains profound logic and wisdom. Only by deeply understanding and skillfully grasping these rules can we navigate steadily through the tumultuous market and ultimately achieve our wealth dreams.

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