Cryptocurrency prices don’t rise and fall randomly. Six factors drive them, and if you understand them, you’ll know when to buy and when to wait.
1. Bitcoin is king
This is the most important factor.
If Bitcoin drops 5%, 95% of other cryptocurrencies drop with it by 7%–10%.
When Bitcoin rises, everything rises with it. That’s why you should always watch Bitcoin first.
2. Supply and demand
Like gold, PAXG is priced at $4,151.
If lots of people are buying and there are only a few coins, the price goes up.
If lots of people are selling and nobody is buying, the price goes down. It’s that simple.
3. US news and decisions
Cryptocurrencies are very sensitive to what happens in the US:
- *If the US raises interest rates:* The dollar gets stronger, people sell Bitcoin and gold, and their prices fall.
- *If the US says it will allow large companies to buy Bitcoin:* The price shoots up.
- *If news breaks that Binance is banning a country:* BNB’s price falls.
4. Whales (people with millions)
If someone with $100 million suddenly sells, the whole market can drop 2% in a minute. As a beginner with $20–$100, you can’t move the market—but whales can.
5. The halving date—specific to Bitcoin
Every 4 years, the amount of new Bitcoin entering circulation is cut in half. This makes Bitcoin scarcer, and its price usually rises the following year. The last halving was in 2024, which is why 2025 saw a strong rally.
6. Does the coin have any real use?
- *BTC:* People see it as digital gold—it has a use.
- *PAXG:* It’s backed by real gold—it has a use.
- *A meme coin priced at $0.00001 with no project behind it:* Its price depends entirely on TikTok chatter, and it can suddenly crash.
*The factor that concerns you:*
The price of *PAXG* doesn’t follow Bitcoin; it follows the *real global price of gold*. If there’s a war or global tensions, gold goes up, and PAXG goes up with it—even if Bitcoin is falling.
*Practical advice for you:*
Before you buy any coin, ask yourself 3 questions:
1. Is Bitcoin going up or down today?
2. Is there any important news about the US or interest rates today?
3. Does the coin I’m buying have a project behind it, or is it just hype?
If you answer these questions, you can avoid 80% of your losses.