A circular orbit is a perfect elliptical orbit. Nothing in nature is perfect; a better question would be “why are orbits elliptical in the first place?”.
The answer to that: two objects in space will always exhibit gravitational attraction towards each other. Imagine you had two objects in space, one more massive than the other. Eventually, gravity will bring these two objects together, and they collide.
Now imagine that you give these objects some relative velocity. It doesn’t matter if you push the smaller object or the bigger object; in space, the difference is irrelevant. If your initial velocity is in a direction that is NOT directly towards the other object and NOT directly away from the other object, you now have a situation where the two objects are still trying to be attracted to each other, but the relative motion means that the direction from one object to the other is constantly changing. Due to inertia, the more massive object will be much less mobile than the less massive object. With enough of a mass difference, we tend to model the more massive object as effectively stationary.
Imagine you were walking in a straight line. Now imagine you still tried walking in a straight line, and grabbed a stationary pole next to you. Because of the presence of the pole, you’re now walking in a curved path. This is basically what is happening to the big object and the small object.
Sometimes the smaller object has so much velocity and distance that the gravitational force of the bigger object isn’t enough to keep it. At some point then, the smaller object is basically “released” by the bigger object’s gravity if the velocity and distance are great enough. But otherwise, the smaller object is *constantly* in the bigger object’s influence. Such a path, then, has to be closed, and without any sharp corners. The only shapes that fit these are ellipses and circles.
ELI10: In reality, although we tend to model massive objects as stationary for simplicity, in reality, every single object in the universe is exerting some gravitational force on every other object. Thus, no orbit is truly perfectly circular. Given two objects, one orbiting the other, perturbations of an orbit can include other celestial bodies, effects of surface angular momentum on orbital angular momentum, oblateness of either object (e.g. if one or both of the objects are egg-shaped), etc.
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