Topic: Correlation between buying and selling of bitcoin: Is it a technical methodology (Read 447 times)

I don't think you'll be able to sustain your income from trading activity in the crypto area based just on what you described regarding the idle learning process in trading skills. Now, if there is a quick spike and decrease in its market price, you are correct; there is a reason for this.

That is why I have emphasized multiple times that most individuals on this community believe it is critical to understand trading. So you can see for yourself which way the price of the cryptocurrency you're dealing on an exchange, whether DEX or CEX, can go.

Miners don't determine the price of bitcoin nor the marketers, it all about the demand of bitcoin and the available supply of bitcoin.

You need first understand that the bitcoin maximum supply will not exceed 21 million, that's has been the basis of the supply of bitcoin and out of that supply, only few about 19 million are in circulating supply. In that circulating supply, there are many that has been lost and by that I mean the private keys to unlock this coins are lost, that means the bitcoin on this wallet can not be accessible, they are gone and los forever, there are many that have not been move for the past 10 years in legacy wallet, the owners have left them idle which people most time refer to as rich list. The rest are been held in exchanges and individuals and I don't that number can account for 50% of the circulating supply, that said.

Now, the bitcoin market is dependent on supply and demand; the remaining bitcoin are been traded on exchange , when a buyer need a bitcoin, he has to agreed to buy on the seller prices, so technically the supply of bitcoin is low and now imagine everyone around the world want to buy bitcoin and there is few bitcoin available, everyone will rushing to buy and the sellers will keep adjusting their sale price and the buyers will also continue to shift their own price as well just to close the spread and have there coin purchase. This is how the price is move and increase and similarly lower when there is fear uncertainty and doubt.

In fact, there is no actual clear reason why bitcoin moves in a four-year cycle. Halving could be a trigger, but it does not have to be. Therefore, it is also very dangerous to fixate on the assumption that bitcoin will continue to soar in 2024/2025, just because it has done so for the last few years.

What is true, however, is that demand drops sharply at the weekend, especially on Sundays. But again, a correlation with collapsing/slumping prices is not fixed as you can see quite nicely on this chart here:

Source: Coinmarketcap

There is a Bitcoin produced every 10 minutes on average. If this Bitcoin is offered for sale, the price of Bitcoin will continue to decline unless the sale stops or there is demand equal to or greater than the value of the Bitcoin being generated. Therefore, you will find that on weekends the price decreases because there is no demand. Enough or the mining farms sell the Bitcoin they own.
This is one of the main reasons why the price of Bitcoin changes dramatically every 4 years.

Supply and demand is the basic driving force in any market price movement and so is with crypto or btc.
As the supply is fixed, then, we can say, demand is the major reason of this roller coaster ride.
And such demand is owed to various players or factors, and up until now is very ambiguous as it encompasses a lot of contributing factors.
This is why you need to keep up with the market, and learn those factors such as new developments, new stakeholders, unexpected events such as big crypto companies collapsing or bankruptcies, among others.

You need to learn more about the law of supply and demand, it took humans a lot of time to learn it but we finally understood how both forces are related.

The price of bitcoin goes up when the demand goes up as its supply is limited, so in order to get it people are willing to pay a little bit more in order to hold some bitcoin, and this process is what increases the price as this happens all over the world at the same time with billions of dollars on the line, and as you may guess when we see the opposite and more people are willing to sell then this increases the supply at exchanges, and in order to get their fiat as fast as possible people are willing to sell for a discount and this process reduces the price.

The basic laws of economics, in any market, are commonplace and can be understood easily. Research on traditional markets in our region will also answer the same question of supply and demand. Therefore, perhaps OP needs to learn more about these basic things before starting to trade. I'm afraid that if the OP doesn't fully understand basic things like this, he will trade in vain (trade blindly)

It's always the market's supply and demand that makes the price to increase or decrease its own market value, and probably the seasonal changes in the market as well. Of course, when people are rushing to buy bitcoin, its demand increases while the supply decreases, thus making the price to increase as well. But when these investors decide to sell their bitcoins, most likely the demand decreases while increasing its supply, hence making the price again to drop low and decrease its value.

However, seasonal changes may also affect the market value of bitcoin. When the market is bearish, it is assumed that majority of the crypto coins are in bargain price, and bitcoin is not an exception. But when the market turns bullish, bitcoin price also is expected to soar high again, but only few of the altcoins can follow its path, as most of them find hard time to increase their own value.

Supply and demand are basic financial fundamentals. When supply increases prices drop When demand increases supply decreases and prices move upward. Mining rewards should make bitcoin inflationary though halving is supposed to slow down the process. So most of the rally in the bitcoin market comes from demand factor. The more new investors come to the market and take a portion of the bitcoin supply out of the market the more demand increases. Halving creates a FOMO in the market so investors rapidly accumulate bitcoin and create a huge gap between supply and demand that causes super spike in the price after halving.

It's basic economics that's entrenched in the law of Demand and Supply, like some users above have explained to you. I said it's basic because no one needs to be highly educated to understand this law. To buttress it further, take for instance someone brings to you a television set that you aren't willing to buy but wouldn't mind having, anyway. You wouldn't be so much interested to bargain upwards with them because you aren't in demand for it. You're going to quote a price that's likely not going to be in favour of the seller. The seller may walk away but may likely come back to you if they don't get someone else to quote a higher price than yours. If the seller gets someone else to buy it off, it means demand is still there for it but if not and they come back to you, you're more likely going to negotiate further down with the seller. That's how price will keep going down if the scenario keeps playing out that way. It's lack of demand that causes buyers to have an upper hand as sellers will be in panic mood to sell cheaper. Every seller in panic wants to quickly sell off so as not to incur more loss. The reverse is the case with this scenario that I've shared.

How is this a difficult thing to understand? I mean lets try to remain a bit mode judgmental but assuming that the question is a legit one, when people buy something, the demand goes up and supply either stays the same or goes down, which makes it go up, because there are not that many left, and people want more for theirs when the yare selling since it's more rare, and when there are a lot more sellers, that means it is not rare, it's common, so the value of it drops. Think about it like gems, when the gem is rare, the value goes up, and when a gem is common the value goes down.

Gold is more valuable than bronze, why? Because you can find bronze commonly, but gold is rare, very limited. These are all important things and makes the price go up and down, just like in any other market. I want to believe that OP really asked it and not really and not really had any other intention, but it does sound like one that is a bit different and difficult to respond when it's this basic.

Selling or buying doesn't controls the market mostly especially I can say the market is seasonal whereby whenever it's time for Bull run we all experience price surge an uncontrollable price increase, likewise to bear season or whenever it's time for dip we can see price declining without any reason and or just because people knew it's bear so the fear to lose their funds is what they can't control. However to me it's basically depends on demand and supply whereby when the demand for bitcoin is high we often experienced increased in price and vise versa.

In this way, it is worth considering that one real person (or a group of people) can own many wallets and use them for the purpose of various manipulations related to a bunch of indicators and other indicators. Therefore, it is difficult to determine the real correlation here

Since the total supply of Bitcoin will not increase by the time where there is a buying or selling pressure, the price moves up and down easily. Meaning the price will depend only in the marketcap.

If the market cap increase 20%, the price will also increase 20%. It's just a law of supply and demand, if there's huge demand of a item, what will people do avoid running out of supply? Ofcourse they make the increase of price of an item.

Since Bitcoin has a fixed supply, sellers won't sell Bitcoin with the same price, it's true if you check the order book, and we have to understand that we have a lot of Bitcoin holders. So investors cannot buy a lot of Bitcoin with same price, it's normal that they have to take price of a seller to be able to do a transaction.

in short, it is the supply and demand concept that move in this market just like any other market. however, to determine the factors affecting such demand is quite varied and so it is difficult to pinpoint one single factor that can influence in this market.
this is why no one can advise him when will the price will go up or down, you can just observe the market and conclude a good guess to where it is going so you can decide if you will buy or sell at a given time period.

I believe you probably must have gotten the answer you need by now seeing that the discussion has been up to two pages already, but let me also chip in what i think is also an accurate answer to your query.

The price of bitcoin is very much determined by the market's supply and demand, supply in the sense that, the more there is more bitcoin in the market to sell, that is, if there are a lot of holders who wants to sell their bitcoin, and the demand is low, demand in the sense that, those willing to buy those bitcoins offered up for sell is low, then this simply means that, the price of bitcoin will likely go down due to the low demand for bitcoin and the high supply of bitcoins for sell.

But on the other hand, when the supply is low, like, if those wanting to sell bitcoin is very low in number, and there are a lot of people wanting to buy bitcoin, that is, the demand for bitcoin is high, it simply means that the price of bitcoin will increase due to the high demand for bitcoin and the low supply of bitcoin up for sell.

I hope this is simple and understandable enough.

You know what people buy, either through trading platforms, in which buy and sell orders can be observed in real time, or through public company statements, which are issued every 3 months after the end of each quarter in the fiscal year, and can be monitored publicly, but you can also buy in the OTC markets and from miners. Directly, this has an impact on the price, but the average individual cannot access such information.
So, the price of Bitcoin changes with changes in supply and demand, but we cannot see all the supply and demand processes, or at least we are unable to see them in real time.

Let me make it very clear for you my friend. Bitcoins are fixed in number, that is no more Bitcoins can be created. Now as Bitcoins are fixed in number, so if the demand to accumulate the coins increases, the supply will become less. In order to fulfil the demand the price goes up, and hence you see price increase, when more people buy the coin. Similarly the reverse happen, when more people sell the coin, they keep the selling price low to sell the coins instantly, and hence the price decreases. Hope this clears some of your doubts OP.

With selling the price become reduces but on the other hand price become boost up if lots of individuals are buying bitcoin because the number of bitcoin present is limited. If lots of bitcoin are in circulation then more people will buy it and and eventually it will increase in price as the number will be reduced after buying. It's obvious that if something is unique and limited in number then it's value will be higher than those materials which are more in number. There is no specific mechanism behind the lower and higher price but the fact is that Sometimes price is also effected by information generated by the people as a consequence of which supply and demand altered and automatically the worth of bitcoin also alter.

What causes the increase and decrease in price of Bitcoin is demand and supply,as far as Bitcoin is limited in supply, if people are demanding for it the price will definitely be increasing  due to it level of scarcity it may be at that particular time, for example you want to a market to get a chicken but due to poultry disease at that particular period and affect poultry they are no many chicken available in the market and other people also in need of chicken at that particular time due to the scarcity of chicken in market people will come with different high price just to get the chicken because it is limited in the market their the price will be increasing, As a result, when there is a large supply of chickens on the market and a lot of people are selling and they are is no many buyer, some sellers will lower their prices simply because they want to sell, while other sellers will do the same, and from that point on, the price will continue to decline because everyone wants to sell.The same holds true for Bitcoin; the more that people buying, the more that the price rises; however, if there are also many selling in the market, the price will continue to fall.