Price and demand
CFTC links virtual-currency value to market supply and demand and warns of high volatility. Changes in willingness to buy and sell affect prices; a previous rally does not guarantee another.
FinFly Explains / Crypto
Why crypto markets move in cycles
“Cycle” describes alternating rises and declines; it does not schedule the next move. Explaining a particular episode needs evidence, not merely similar-looking charts.
What leverage adds
Borrowing amplifies a price move’s effect on a position, including losses. A small market movement therefore need not mean a small risk to the participant.
A spike is not necessarily a trend
CFTC also warns about coordinated price promotion followed by organisers selling. A sudden rise and heavy publicity do not by themselves establish durable demand.
Checking an explanation
FinFly recommends separating “the price rose” from “this news caused it”. Record the period, price source and evidence for the proposed cause. Without evidence, it remains a hypothesis.
Questions
Short answers
Must a decline be followed by recovery?
No. Calling it a cycle neither guarantees recovery nor identifies a buying date.
Method
Primary sources
The explainer is checked against these institutional and industry sources. Links open the original material.