Why Cryptocurrency is Highly Volatile

Market Speculation
Cryptocurrency prices are heavily influenced by speculation. Investors' sentiment can change rapidly, leading to large price swings based on news, rumors, or market trends.

Regulatory News
Changes in regulations or government stances on cryptocurrency can cause immediate and significant price fluctuations. Uncertainty about future regulations contributes to market volatility.

Market Size
The relatively small market capitalization of cryptocurrencies compared to traditional assets means that large trades can significantly impact prices, causing high volatility.

Technological Developments
Innovations or issues in blockchain technology can affect cryptocurrency values. Upgrades, forks, or security breaches can lead to rapid price changes as the market reacts.

Liquidity
Cryptocurrency markets often have lower liquidity than traditional markets. This means that buy and sell orders can cause larger price movements, contributing to overall volatility.