I've just noticed that the law of supply and demand is a fundamental concept for anyone who wants to understand the market, whether it's stocks or digital assets. In this tense world with many stories, the actual prices are always driven by these two basic forces.

Supply is the desire to sell, and demand is the desire to buy. Simply put, when prices go down, people want to buy more (leftover income in their pockets increases), and when prices go up, people start wanting to sell or switch to other assets. This is what is called the law of supply and demand.

But beyond price, there are many other factors, such as investor confidence, government policies, seasons, or even actual wars. For example, when the Strait of Hormuz is closed, about 20% of the world's crude oil passing through disappears, causing supply to drop sharply while demand remains the same. The result is a rapid increase in prices.

In the stock market, supply and demand work in the same way. When good news comes out, buyers are willing to pay higher prices or buy in larger quantities. Meanwhile, sellers hold back from selling, so prices rise. Conversely, with bad news, buyers hold back, and sellers are willing to lower prices, causing prices to fall.

Technical analysis also uses this principle. Looking at candlesticks, if they are green (close higher than open), it indicates strong buying pressure. If they are red (close lower than open), it indicates strong selling pressure. As for support and resistance levels, support is where buyers are waiting to buy, and resistance is where sellers are waiting to sell.

The Demand Supply Zone technique is used by many traders. This approach involves identifying moments when the price leaves equilibrium, causing a rapid rise or fall, then consolidates within a range. When new factors come in, the price breaks out of that range and continues in the same direction or sometimes reverses.

For example, if the price drops sharply (Drop) and then consolidates to form a base, when buying pressure returns strongly, the price will rally upward. This pattern is called DBR (Drop Base Rally). Conversely, if the price rises quickly (Rally) and then consolidates to form a base, when selling pressure returns strongly, the price will fall. This pattern is called RBD (Rally Base Drop).

More often, prices move in continuous trends, such as RBR (Rally Base Rally). When buying pressure remains strong, prices will rise, consolidate, then continue upward. Or DBD (Drop Base Drop), when selling pressure remains strong, prices will fall, consolidate, then continue downward.

Actually, understanding supply and demand isn't that hard. You just need to watch real market prices, check when prices change, and see what factors are involved—news, policies, or even market sentiment. The more you practice, the clearer the picture becomes. By observing supply and demand, you can plan your trades better. Try looking at prices on Gate or any other platform, and apply this concept—you'll see it really works.