Government regulations can affect demand and supply, this condition can occur because the government has the authority to regulate/prohibit all activities related to Cryptocurrency. Just as China did in May 2021 which issued a warning regarding trading and mining of crypto assets, after that China held a meeting with banks with an ultimatum that banking institutions may not be involved in cryptocurrency transactions.
Government regulations can have an impact on the price of Bitcoin, but investors don't really care about government regulations because they have their own perceptions of the long-term prospects of Bitcoin. For investors who still believe in the future growth of bitcoin, they will not be easily influenced by negative issues and negative attacks from government regulations.