Learn / Beginner · Markets and Risk

Why do crypto prices move?

Beginner · Markets and Risk · about 3 min read

Crypto prices move because of supply and demand: how many people want to buy compared with how many want to sell. When more people want to buy than sell, the price tends to rise. When more want to sell, it tends to fall.

What pushes demand and supply

• News. Rules, big company announcements, hacks and new products can change how people feel overnight.
• Mood. Excitement can drive prices up fast, and fear can drive them down just as fast.
• Scarcity. Some coins have a fixed or slowing supply, so a rise in demand can have a bigger effect.
• Big holders. A few large owners buying or selling can move a smaller market.
• The wider economy. Since about 2020, crypto prices have moved more closely with stock markets, so wider economic news can spill over.

Why swings are bigger than in many markets

Crypto trades every hour of every day, but the buyers and sellers who steady prices are fewer at quiet times such as weekends. Some traders also borrow money to trade. When prices fall, their positions can be closed automatically, which forces more selling and can make a drop steeper.

Keep in mind

• Nobody can reliably predict prices, including experts and influencers.
• A price that has risen fast can fall fast. Hype is not a reason to buy.
• Never borrow money to buy crypto, and only use money you could afford to lose.
• Prices on the Markets page are a snapshot. They change all the time.

Key terms

Supply and demand, volatility, market mood, liquidation.

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