I just realized why stock prices and digital asset prices move like this. It made me think about the most fundamental concept: demand and supply. What exactly do they mean?

Actually, demand and supply refer to the desire to buy and the desire to sell. They are the basic forces that drive the prices of everything, from stocks, energy, gold, to digital coins. Whether the world is tense or there is good or bad news, this remains an unchanging rule.

They are divided into two clear sides: the demand side is the desire to buy. When prices go down, people want to buy more. When prices go up, demand decreases. The supply side is the desire to sell. When prices go up, sellers want to sell more. When prices go down, they don't want to sell as much.

What’s interesting is that the actual price occurs at the point where the demand and supply lines intersect. This is called equilibrium. At that point, the price is stable because if the price rises too much, sellers will sell more, creating excess supply, which causes the price to fall. If the price drops too much, buyers will buy more, causing shortages, and the price will go back up.

In financial markets, demand and supply refer to buying and selling forces. Factors affecting demand include economic conditions, interest rates, investor confidence. Factors affecting supply include company policies, new listings, market regulations.

Looking at a real example: in March 2026, when the Hormuz Strait was closed due to the Iran war situation, crude oil supply decreased by about 20% globally, while energy demand remained the same. The result was a rapid surge in oil prices. This is a clear supply shock.

This principle applies in stock trading as well. If prices keep rising, it indicates strong demand. If prices keep falling, it indicates strong supply. Professional traders use Demand and Supply Zones to identify when the price is losing balance and looking for a new equilibrium.

One way is to look at candlesticks: a green candle (closing higher than opening) shows strong demand; a red candle (closing lower than opening) shows strong supply; doji (opening and closing at the same level) indicates indecision, with both sides battling equally, and the direction is uncertain.

Another method is to look at support and resistance levels: support is where buying interest is waiting; resistance is where selling interest is waiting. If the price breaks through resistance, it shows buying dominance; if it breaks support, it shows selling dominance.

The best thing is, if we understand what demand and supply mean, we can better predict prices. Whether through fundamental or technical analysis, both are based on the same principle: buying and selling forces, demand and supply.

Most importantly, we need to observe actual prices to see how they work in practice—not just theory, but real application in trading.