Bitcoin was developed in 2009, so it is still pretty young concept and that is the first reason why Bitcoin\'s market is very volatile, people are still adopting this concept, most of people still don\'t understand the main reason of creating Bitcoin and other cryptocurrencies. Volatility of the Bitcoin\'s market can also be explained by demand and supply of bitcoin. It is pretty simple economic rule, if demand is rising price is rising too, people are ready to pay much more for 1 Bitcoin then before. This supply demand example can be the cause why Bitcoin is constantly reaching peaks and then crashes. As we already said as demand is rising, the price is rising too, but at the some point, when price hit high level, some people are ready to sell their Bitcoins and make a decent profit. Example of the crashes of Bitcoin market can be explained with the situation when people are selling their Bitcoins, supply is rising and the effect is opposite then above mentioned with the demand, in this scenario price of Bitcoin is falling down.
When it comes to supply and demand, there are more then one factors that influence whole market. First factor is adoption rate, as we said Bitcoin is young concept, more people know about concept the price is rising. Second factor is the fact that there is finite amount of Bitcoins, there are only 21 million of its. The questions with regulation and government are the third factor, because every single negative statement of governments over the world are decreasing adoption rate of cryptocurrencies and the adoption is key factor. Improvement of technology could also be another factor that affect market and the key factor of improvement is blockchain technology.