The cryptocurrency market is governed by supply and demand.
Here I explain how it works:
Factors that influence demand:
1. Adoption: more users and companies are using cryptocurrencies
2. Regulations: changes in laws and regulations
3. Announcements: news and announcements of projects
4. Sentiment: mood of investors
Factors that influence supply:
1. Mining: amount of cryptocurrencies mined
2. Sales: amount of cryptocurrencies sold by investors
3. Burn: destruction of cryptocurrencies (some projects burn them to reduce supply)
How supply and demand relate:
- High demand + low supply = Price rises
- Low demand + high supply = Price falls
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