Why do cryptocurrency prices go up and down?

Cryptocurrencies , like all other assets, see their price vary according to the market (depending on supply and demand). In simplified terms, thousands of sales and purchase orders are set at a given price and quantity. 

When someone buys , they execute the cheapest contract (they buy at the best price). The person who wants to buy after the first individual, must do so against a more expensive order. We can therefore deduce that the price has increased . 

Conversely, during sales, the more sales are executed, the more the price will decrease. Other mechanisms govern the theory of supply and demand. 

Thus, if traders believe that the current price is below the true market value (that the asset is undervalued), more of them will want to buy. Conversely, if the price is too high, more of them will want to sell.

For example , let's say someone just bought 1 Bitcoin for $10,000. Now let's say 3 people want to buy Bitcoin at 9,500, 9,000, 8,500 and 3 other people want to sell at 10,500, 11,000, 11,500. 

If one person wants to instantly buy 1 Bitcoin, they will be forced to buy it at $10,500, the best price on the market. Therefore, the price of Bitcoin will have increased by $500.

Below is an overview of the Bitcoin order book on the Binance cryptocurrency buying/selling platform .

The events

Cryptocurrency (and stock) price fluctuations aren't solely driven by speculation. Significant events can occur, causing the price to rise or fall. 

For example, when a cryptocurrency is introduced to a new mainstream exchange , new buyers will be able to acquire it, and therefore its price increases. Conversely, when a cryptocurrency is hacked, its price plummets.

The outcome of an event on the price of an asset reflects the confidence that investors have in it.