What causes cryptocurrency to rise and fall

The crypto market is extremely volatile. It's now no longer unusual for Bitcoin (CRYPTO: BTC) to rise or fall in price by 5% or maybe 10% on any given day. Small cap cryptocurrencies may have even more volatile price swings. After reading this article, you may will have a better understanding on the price swings and reallywhat makes crypto currency rise and fall.

Crypto 101

Cryptocurrencies are not issued by a central bank or a central government. Instead the crypto projects are run on the blockchain. Each token has its own community of supporters that want the project to succeed. While other people are trading a token to make money. The main thing that makes the price rise and fall is support and resistance. When buyers believe the price should not go any lower they buy the token. When sellers believe the price is too high they will drive the price down.

The entire crypto ecosystem supports itself on the blockchain. And the price of each token can also get affected by daily news, or other things that can drive the price up or down.

Cryptocurrency Price Swings Supply and demand affect the price of cryptocurrencies. For example, if there is a drought, the charge of grain and convey will increase, while if there is too much grain the price of grain will decrease. The same concept applies to cryptocurrencies.

Some cryptocurrencies have mechanisms that "burn" present tokens to save the circulating supply. Burning a token is also done to control inflation and may affect the price. As more people want to buy crypto tokens the price will continue to rise and as more people panic sell tokens the price can go down as fast as it went up. So there is no one reason why the price goes up or down.

Whats more important is watching the news to see what’s going on in the crypto space so you can make an informed decision before you buy or sell crypto.

Conclusion

As a result, the price isn’t always fixed. Broader adoption of a cryptocurrency will increase the price as well.. For example, while institutional buyers buy Bitcoin, the price accelerated substantially.