The rise and fall logic of the Crypto Assets market

Policy Regulation:
The policy environment directly affects the market legality and capital flow of Crypto Assets. For example, China's comprehensive ban on Crypto Assets in 2021 led to a sudden 30% fall in Bitcoin prices; whereas after the United States approved the Bitcoin ETF, the price soared by 20%.

Institutional Entry:
Institutional funds are massive, pushing prices up when buying and triggering sell-offs during sell-offs. For example, Tesla bought $1.5 billion in Bitcoin in 2021, driving the coin price above $60,000; MicroStrategy has been continuously hoarding coins, being humorously referred to as the "Bitcoin piggy bank."

Technological Innovation:
Technological innovation is an important driving force behind the rise in Crypto Assets prices. For example, Ethereum upgraded to a POS mechanism, and the price rose 50% three months in advance; the Solana network went down 10 times, and the coin price halved.

Macroeconomics:
During an economic crisis, Bitcoin can transform into "digital gold"; when the US dollar strengthens, funds flow back to traditional markets. For example, the Federal Reserve's interest rate hike led to a sharp fall in risk assets, with Bitcoin dropping below $20,000; when the Russia-Ukraine war broke out, Bitcoin surged by 15% in a single day.

Market sentiment:
Reduce positions when market sentiment is extremely euphoric, and buy the dip when the market is desperate. For example, when Musk said "Dogecoin is the people's currency," Doge surged 10 times; after the Luna collapse, the "fear index" went off the charts, and retail investors cut losses and left the market.

Supply and demand changes:
Constant total supply + increasing demand = long-term bullish; unlimited issuance + declining popularity = warning of zero. For example, the Bitcoin halving event has historically seen a rise of over 500% after the first three halvings; a large number of new coins listed on exchanges → oversupply → price crash.

Black Swan Event:
Sudden events instantly destroy market confidence, triggering a chain reaction. For example, the FTX exchange collapse brought down the entire market; North Korean hackers stole 600 million in Crypto Assets, triggering a sell-off.

These factors work together, resulting in the drastic fluctuations in Crypto Assets prices. Investors need to closely monitor the changes in these factors to better grasp market trends.