Unlike any other commodity, bitcoin has most influential factor for deciding it's price levels, it is network's difficulty levels. When more bitcoin miners enters into mining bitcoin then we can expect the price raise of bitcoins. The vice versa also true.
It's supply and demand theory only. Fundamentally bitcoin is similar to all other traditional things. Like any things in this world, only supply and demand moves bitcoin prices also....
If more people want bitcoin, its price will rise. It is quite simple. It is not affected by mining difficulty. If the price drop, miners will turn off their miners.
the price is purely build up on the demand, that's right. the difficulty simply adjusts itself to whatever the current price is. if there is low demand, then the result of that is a lower price, and that might result in a lower or less higher difficulty. from time to time you can see the potential difficulty increase will be 8%, if the price comes down for whatever reason, you can then see the difficulty go down from 8% to around 5%.
