Every beginner trader faces the question: where does the money for price growth come from and where does it go during a drop? Let's figure it out with the example $ETH .
📌 The price rises when there is demand.
The price is formed based on supply and demand. If more people want to buy ETH than sell, they start offering higher prices to get the asset faster. This is how an upward trend is formed: new buy orders raise the price.
Our chart shows that after a period of stability, ETH made a sharp move down and then began to recover. This could have happened due to large players exiting positions or due to news that scared the market.
📌 The price falls when more is sold than bought.
If most traders are selling ETH, the supply in the market increases and the price decreases. This can be triggered by panic, profit-taking, or other factors. Money doesn't disappear — it moves to those who buy cheaper.
The chart shows red candles, indicating that someone was selling at market prices, causing a drop.
🏆 How will this help newcomers?
✔ Don't be afraid of drops — they create opportunities to buy cheaper.
✔ Watch the volumes — if the volume is high during growth, it confirms the strength of the move.
✔ Study indicators — RSI (on the chart) shows when the market is oversold or overbought.
💡 The market is not a zero-sum game. Every price movement is the result of the struggle between buyers and sellers. Your task is to be on the right side.
If you're interested in discussing more nuances — write in the comments! 🔥
