Here are some key factor's
1_Market Demand and Supply :
The balance between buyers and sellers directly affects prices. Limited supply (e.g., Bitcoin’s 21 million cap) can drive value up when demand spikes, as seen during the 2021 bull run when Bitcoin hit nearly $69,000.
2_Regulatory News :
Government policies can cause massive swings. For example, China’s 2021 crypto ban crashed markets, while the U.S. approving Bitcoin ETFs in 2024 boosted investor confidence and prices.
3_Adoption by Institutions and Businesses :
When companies like Tesla (2021) or PayPal (2020) embraced crypto, markets surged. Institutional investments from firms like BlackRock continue to signal legitimacy, pushing prices higher.
4_Macro-Economic Conditions :
Inflation and interest rates matter. In 2022, rising U.S. Federal Reserve rates tanked risk assets like crypto, with Bitcoin dropping below $20,000. Conversely, economic uncertainty often drives “safe-haven” buying of Bitcoin.
5_Technological Developments :
Upgrades like Ethereum’s 2022 shift to Proof-of-Stake (The Merge) can boost efficiency and attract investors. Hacks or network failures, like the 2016 DAO exploit, can tank confidence and prices.
6_Market Sentiment and Media :
Hype cycles amplify volatility. Elon Musk’s tweets in 2021 pumped Dogecoin over 10,000% in months, while FUD (fear, uncertainty, doubt) from negative news can trigger sell-offs.
7_Global Events :
Wars or crises can spike crypto use. During the Russia-Ukraine conflict in 2022, crypto donations soared, and Bitcoin rose as a hedge against currency devaluation in affected regions.