#SupplyAndDemand

Supply and demand are key factors in the prices of cryptocurrencies. The supply side includes the total number of coins a cryptocurrency can have, like $BTC limit of 21 million, and the number of coins currently available, known as the circulating supply. When fewer coins are available, their price can rise due to scarcity. New coins enter the market through processes like mining, which can increase supply and potentially lower prices if demand doesn’t match. Events like Bitcoin's halving reduce new coin creation, often leading to price increases due to reduced supply. On the demand side, factors like positive news, widespread adoption, and investor interest boost demand and prices. More people and institutions buying cryptocurrencies can significantly drive prices up. However, bad news, market corrections, or regulatory issues can decrease demand, causing prices to fall. The balance of supply and demand is what sets a cryptocurrency's price. In bull markets, high demand drives prices up, while in bear markets, low demand and high supply push prices down. Additionally, large investors, or "whales," can manipulate markets by making big trades that affect prices. Understanding these basics helps in navigating the volatile crypto market and making informed investment decisions. Staying updated on market trends and news is essential for anticipating changes in supply and demand dynamics.