The reason for the rise or fall of the cryptocurrency (or any financial asset) depends on the law of supply and demand, but there are several key factors that directly influence price movement:
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Firstly: Reasons leading to the currency rise (Bullish)
1. Increased demand
Entry of large investors (whales).
Increase in the number of new users.
Real use of the project (e.g., using the token in a practical application or platform).
2. Positive news
New partnerships with major companies.
Successful technical update launch (like network upgrade).
Listing the currency on major platforms (like Binance or Coinbase).
3. Scarcity and reduced supply
Token Burn.
Reduction of mining rewards (Halving like Bitcoin).
Users storing the currency and not selling it (HODL).
4. Technical analysis
Breaking strong resistance + supporting indicators like RSI, MACD.
Increased trading volume abnormally.
5. Media momentum (FOMO)
Buzz on social media.
Recommendations from influencers or analysts.
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Secondly: Reasons leading to the currency drop (Bearish)
1. Increased supply versus demand
Intensive selling by whales or large investors.
Releasing large amounts of tokens to the market (like the end of the lock-up period – Unlocking).
Liquidity leaving the project.
2. Negative news
Security breach of the project.
Lawsuits or regulatory bans.
Failure in a technical update or cancellation of partnerships.
3. General down market (Bear Market)
Bitcoin's decline usually pulls down the rest of the market (Altcoins).
Panic and random selling (Panic Selling).
4. Negative technical analysis
Breaking strong support.
Indicators like RSI below 30 or negative crossover in MACD.
Negative reversal candles (like engulfing or shooting star).
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Simple example:
A currency like KASPA:
If it is announced to be listed on Binance = demand increases = price rises.
If a security breach occurs in its official wallet = market confidence decreases = people sell = price drops.