How does demand affect bitcoin price?

Could you elaborate on how demand factors into the determination of bitcoin's price? I'm curious to understand the dynamics at play here. Does an increase in demand automatically lead to a rise in the price of bitcoin? Or are there other variables that also come into consideration? I've heard about supply and market sentiment playing a role, but I'd like a more in-depth explanation of how demand specifically impacts bitcoin's valuation. What kind of trends do we observe when demand for bitcoin rises or falls? Thank you for clarifying this aspect of the cryptocurrency market.