Topic: Correlation between buying and selling of bitcoin: Is it a technical methodology (Read 451 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.

There is no such thing as marketers on this market. It's all about the supply and demand of Bitcoin and that's making the price go high and down.

That's more of the technical thing and also about the halving which cuts the reward for the miners, when there's lesser reward for the miner. It's giving the lesser amount of Bitcoin which makes mining more expensive because the supply that's being mined is lesser than before.

Moreover, just go back to the law of supply and demand and that's it.

The law of  demand and  supply has a lot to do with the increase in  supply and availability of the product(bitcoin), once there is a scarcity of the product, the value goes high,  so also if the product is very much available, the value drops. So the market forces between the buyers and sellers, always determines if the value will increase or decrease.
So if a seller deside to sell the product at a higher amount, automatically most sellers will tow towards increasing amount of the product, buyer's will try to fight that amount to a lower price. Hence there will be a back and forth price range between both of them.

Every average of 10 minutes, a Bitcoin block is mined with thousands of transactions in addition to 6.25 new Bitcoins being generated. These Bitcoins may enter the market directly as a quantity offered or may be kept. If they are kept, the market will change according to the price movement over the two days, even if there is a demand higher than Selling will increase the price, and the statement is true, so you always find that after the block reward is reduced, the miners keep Bitcoin because they believe that its price will increase, and traders and investors will do likewise. As a result, there is no new supply and there is an increase in demand, so the price rises.

The market isn't "programmed". The exchange doesn't set the price. It just reports the price of the most recent trade as "the price". The exchange actually reports three prices: bid, ask, and last. bid is the highest price that any buyer is currently offering to pay, ask is the lowest price that any seller will currently accept, last is the price of the most recent trade.

Traders set the price they want to buy or sell at, and the prices of trades change as a result of traders competing against each other. If a trader can't buy or sell at the desired price, then they have to raise or lower the desired price until they can execute a trade.

Also, there are people that buy or sell "at the market", which means they pay the ask price or they sell at the bid price.

The price represents the balance of supply and demand. By supply we mean the coins available for sale - not the total amount of coins in existance. By demand we mean the amount of fiat money that want to buy Bitcoin. The price goes up when demand is larger than supply. This can mean that either more fiat money wants to buy Bitcoin, or that less bitcoins are up for sale. Price fall is the opposite - more coins are up for sale, less fiat money that want to buy them.

I see that the discussion has been broken up by examples of fruits, miners and the Halving event, among others.

First of all, I mentioned it in recent days, you may know absolutely nothing about bitcoin, as in this case, perhaps!, but you pose your question incorrectly, that is, the short answer is supply and demand. Spot!

OP, you question a "thing",  that you should known..., in fact, it is something empirical, that is, you learn without going to school; it is, supply and demand determines the price of any "thing."

Then, your doubt begins for not understanding these basic principles that apply to everyday life  and that in a way is the best example ever, of how to learn about bitcoin.

How do you want to learn about bitcoin if you don't master other basic concepts, which are sometimes general culture or traditional academic training to deal with other knowledge..

If you want to learn about bitcoin, you must have an "academic" or empirical basis that allows you to understand that natural correlation between supply and demand.

Then, supply and/or demand is a variable that intrinsically depends on the niche where it operates, bitcoin, like any other "thing" that is bought and sold, is affected by different factors that make the supply and demand variables, affect the price.

So, almost always these variables, supply and demand, are based on situations intrinsic to them, e.g.; Supply remains the same,(1) demand grows, then )supply falls therefore demand remains the (2) same or (3)grows.

Now, unlike those traditional "things", bitcoint maintains a limited production, that is, "21 million" and it is that same fact which makes it attractive, but the intrinsic laws of supply and demand "punish" it and make it go through that volatility that affects its price, not only upwards but also downwards.
^imho.

---

^{Read about supply and demand, then you can understand which factors affect the price of bitcoin in the short, medium and long term.
Those factors that affect the price may not be constant or the same always, but if there is a correlation between them, perhaps you should start with the basic concepts, below is a link, then look for documentation that will help you applied to the bitcoin case, in our forum you will find You can learn a lot about the subject, but reading it is not understanding it, you have to study it, and what you learned will surely change tomorrow.
https://en.wikipedia.org/wiki/Supply_and_demand}

Welcome to your Bitcoin trip. Exciting, right? You want to know how Bitcoin prices move, which many beginners find puzzling. I have an idea: Prices rise when people buy and fall when they sell because of supply and demand. Buyers express desire. When demand is high and supply is low, prices soar.

Limited Bitcoin supply and low mining returns raise the question of what will happen when we reach that limit. How would that affect prices and miners' motivation? That sparks ideas. Will supply and demand hold when block payments, miners' main motivation, become less important?

The market works with a Supply and Demand principle in general.

Sellers sell bitcoins and buyers buy bitcoin. If selling pressure from sellers is bigger than buying force from buyers, price will fall. If buying force is bigger than selling pressure, price will take off.

However, in this market you must know about leverages, margins, futures and forced liquidations that can make price crashes or rises a lot. Many people lose money by forced liquidations when they want to gamble in the market.

The answer is Volume and Time.

Prices are booked based on what is agreed price being bought and sold. Depending on the volume of the specific time an asset is being transferred, it will paint the price as how it is illustrated in candlestick charts.

When the volume changes because there's lesser participants or the time change because it passed, then it will consider as another transaction.

In short, by October 11, 2023 9:03 PM (time) a person will sell 1BTC on 4 willing buyers (volume). When It's already 9:04 (time changed) and only 3 willing buyers accepted the transaction, that's how the price was booked.

Exactly the number of buyer is equal to the number of seller but the price set out is different. For example if the bitcoin price is $27k just like it has been moving side ways this past few days then a bad news hit crypto world like an exchange getting to close down or something like that then many people have large funds on that exchange so they are obliged to sell, with this news the buyer now sets is price down from $27k to $26.5k. With the desperate need of selling the seller trades at that price, then the price chart of others will ultimately change too and as the sellers are desperate they sell at the price. Now with more sellers coming to sell at that price the buyers now influence the market again by going lower since the supply is more. This how you find the price decreasing gradually until dust settles.

Once everything settles, and many buyers are back to accumulate maybe for occasions like halving, this time the seller sets a price and since the buyer is desperate to have is bitcoin he aggress with that price and buys, subsequently other buyers follow suit and the price begins to go up again as the seller this time around sees many desperate buyers

With this illustration, that means the market is already programmed to work in that manner. The more people demand for bitcoin, the price will tend to increase itself and when they sell, the price begins to reduce. Buying and selling are proportional to each other, because you can’t buy when there’s no seller. If that is the case, won’t buyer=seller; then where does the market programmed that way to increase or reduce the price of bitcoin come into play in such scenario?

Again if you read and understand my statement you'll see that I clarified that it's the circulating supply on an exchange. Buying and selling affect the circulating supply on an exchange and the circulating supply of Bitcoin currently is showing on coingecko as BTC19,508,837. Circulating supply can't be measured in fiat value but actually figures. The circulating supply mightn't be accurate as well because I don't see how possible it is to track all Bitcoin in circulation as some might be lost or not on the market circulating (as a result of investors hodling).

Buying and selling affect the circulating supply of Bitcoin on an exchange as when they're more buyers, technically more Bitcoin are leaving the exchange while when there's more sellers more Bitcoin are been introduced to the exchange.

Yes, buying and selling of bitcoin does not affect the total supply of bitcoin but neither do they affect the the circulating supply of bitcoin. The circulating supply of bitcoin which is currently approximately $19.5 million is affected by nothing than mining reward, but the supply can have have effect on the price of bitcoin as lost coin among them will make bitcoin scarce and which can have positive effect on bitcoin price.

the supply was always 21 million. the ability or pace to unlock all the 21 million coins slows every 4 years.

my biggest wish about btc would be to have had 4 blocks an hour not 6.

1/2ings would have been every 6 years not every 4. same 21,000,000 coins

so
 satoshi's way.      Phil's way
2012 50-25            2014 50-25
2016 25-12.5         2020 25-12.5
2020 12.5-6.25      2026 12.5-6.25
2024  6.25-3.125   2032   6.25-3.125


but projections like above are think experiments or imagination games. I have to think it would have made a large difference in growth rates of coin value.

You are forgetting one important aspect. No one can generate more bitcoin than what is written in the consensus rules. The coin's scarcity coupled with big demand gives it value. The newly minted coins per block are fixed, regardless of how much processing power you possess. But a new apple producer that enters the market with a huge supply is able to bring the prices down and even put small producers out of business.   

I think that would be wrong to say that such actions will not increase or decrease the quantity of BTC available. Because the overall quantity remains the same, while the circulating BTC increases or decreases. For example if one is selling and that is reducing the price it, means that person has reduced the amount of BTC in circulation and vice versa. But after reading this you will be confused and will ask that if someone is selling then on the other hand someone would be buying it too. Right?

But my dear, it is not necessary that on the other hand, a buyer will be present because, on most of the exchanges, there are liquidity pools of the exchanges which ensure a seamless trading experience. This means they don't want you to keep in waiting for the completion of the trade, they will trade your USDT with their own BTC or vice versa. And just giving a remainder, the price of BTC does not solely depend on the Demand and supply factor.

This is the most simplest and technical explanation of the buying and selling correlation of BTC. And I really liked this explanation. To be honest, I don't think OP needs another explanation for understanding it.

Bitcoins do not expire, bitcoins do not rot, you don't consume Bitcoins and they are not produced randomly in one season but with near complete accuracy. Also unlike a miner who can simply shut down its miners if the reward is lower than the costs there is no way for a farmer to cut losses with the same predictability, plus, let's not even mention the fact that no matter how much gear you point at mining coins you won't be able to mine more than 900 coins a day on average, with apples it takes a few years but you cat quadruple the entire world production.


That's one of most annoying thing, I just hate when some claim that the supply is going down with the halving.


Oil is not in fixed supply and it went from -40 to $80, something I don't see Bitcoin ever being able to replicate 
Volatility has nothing to do with the supply, stocks have a limited supply too and they are all over the place in a messy day.

Well apples can be kept fresh for 13-15 months.

https://www.foodrenegade.com/your-apples-year-old/
https://en.wikipedia.org/wiki/1-Methylcyclopropene


So they are not the example to use.

Back to op's question.

Perception of necessity can raise demand a lot.

So if people think they need it and can not get it the price rises.

Thus the ½ ings create the perception it is running out.

Next year blocks drop to 3.125 coins .

the daily crop of coins will drop from 144 x 6.25 = 900 to 144 x 3.125 = 450

It all comes on to the key players influencing the Bitcoin price. Who are the key players here? Buyers, Sellers, miners because of the mining rewards, and those who speculate. The price of Bitcoin reflects the supply and demand with a given limited supply of the number of Bitcoin that can be mined. When the demand for Bitcoin is high the price will go up, when the demand for Bitcoin is low the price will go down. It is a basic economic principle where buying and selling activities impact the price.

As an example let me quote you how an apple farmer sells his apples. We are considering that the farmer in a year through his farm produces 1000 apples. If the demand for apples goes high with the fixed produce then the farmer will increase the price. If the demand for apples goes down with the fixed produce then the farmer will reduce the price. The reason is that you cannot sell stale apples in the market.

Simple reason; Demand and supply. Both buying and selling happens when the price of Bitcoin is increasing and when it's decreasing but the difference is that when the price is increasing, there's more of buying going on and when it's decreasing, there's more of selling going on.

The action of buying and selling can actually affect the quantity of Bitcoin available on the market because the more we have more people selling (a larger quantity of Bitcoin will be available on the market) but when we have more of buying going on, they'll be reducing the quantity available for trading as more people are buying.

Buying and selling doesn't affect the fixed supply of Bitcoin but it affect the circulating supply. Just understand that selling = more people bringing their Bitcoin to the market (which increase the circulation supply on exchanges).

Actually, there are too many factors to consider that make the Bitcoin price so volatile.
It could be this,

• supply and demand in the open market
• buyers, sellers, market makers, and speculators
• miner
• market events and media coverage like news

So in short, just because of the fixed supply of Bitcoin, the price is so volatile.
This is why the price can go up when there's more buying pressure and down when there's more selling pressure, even though the total supply remains constant.

No, it isn't, IMO, it's more on fundamental concepts than technical methodology.

Nothing technical it is affected by demand and supply just like some commodities like stock. It only stands out because of its fixed supply limit and this as it grows will only causes scarcity which increase its demand and then increases its price.

When many people buy the demand for it has increase so the market just increases it prices and same goes as when people starts to sell off. Just thing of your agricultural produce when they are scarce in spring time how they go up in price and when they are abundance in winter how they fall in price

Marketcap = bitcoin price x circulating supply

Bitcoin price = marketcap ÷ the circulating supply.

From the calculation, you can see how marketcap is proportional to the price.

The more people buy bitcoin, the marketcap increases which is directly proportional to the the price. The more people sell bitcoin, the marketcap decreases which is directly proportional to the the price.

For the time being I have joined bitcointalk and also the bitcoin market. I always hear that, when the market is buying there will be an increase in price of bitcoin and when it is selling there will be a decrease in the price.
My question is that, what makes the price go up as people are buying and the price goes down as people are selling because what I understand is that this action cannot increase or reduce the quantity of bitcoin available, so what action actually makes it to increase or reduce in price, is it the marketers, miners or who does that? Is there any technical reason behind that actually?
More clarification on this will be appreciated.