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

What you see in the cryptocurrency price intraday chart is actually a trajectory formed by the latest transaction prices linked together every minute, and this trajectory's drawing has no direct correlation with the 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 always go hand in hand, interdependent. Because every transaction must be accompanied by a buyer's bid and a seller's acceptance.

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

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

Let me explain with a vivid example: suppose a certain virtual currency's current trading price is 10 yuan, and there are 10 investors willing to buy at 10 yuan, while only 9 investors are willing to sell. After these 9 transactions are completed, there is still 1 investor who has not been able to buy the desired currency.

To complete the transaction, this investor has to raise the bid and seek sellers willing to sell at a higher price. For example, he chooses to raise the bid to 10.1 yuan and is fortunate to find a seller willing to sell at this price. Thus, the latest transaction price is fixed 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 cannot meet the market's supply demand, this investor may have to continue raising the bid, seeking transaction opportunities at 10.2 yuan or even higher. Thus, every increase in the cryptocurrency price becomes a direct reflection of the market's supply and 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 realize our wealth dreams.

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