In this AI-driven era, here’s how the cycle works: When coin holders increase, the price drops. When holders decrease, the price shoots up — just to trap new buyers at high prices. Then the classic "high-to-low" cycle begins, and people are forced to sell at a loss.
The circulating supply of many coins increases over time. When new tokens enter the market through mining, staking rewards, or the unlocking of team-allocated tokens, selling pressure rises. If demand remains low while supply increases, the price naturally begins to drop.
2. Hype and Pump & Dump
When a new coin is launched or a major announcement is made, it creates instant hype in the market. Everyone rushes to buy it, driving the price to its All-Time High (ATH). However, once the hype fades, large investors (whales) cash out their profits, causing the coin's price to gradually decline.