Understanding the Ups and Downs of the Crypto Market
The market sometimes goes up and down quickly because of big investors, often called "whales." These whales have a lot of money to invest, which gives them the power to change the market prices. They might do this by buying a lot of cryptocurrency, which makes the price go up, and then spreading good news to get other people to buy it too. Once the price is high enough, they sell everything, making the price drop fast. This leaves smaller investors who bought at the high price with losses.Also, the market is influenced by how people feel.
When prices go up quickly, some people feel like they need to buy quickly too, which pushes the price even higher. But when the price starts to fall, these same people might panic and sell everything, making the price drop even more.
Whales might also try to take advantage of areas in the market where a lot of people have placed orders to sell their assets if the price falls below a certain point. They do this by quickly changing the price, which makes these orders happen, and then they can buy or sell at better prices.
Understanding these strategies can help traders avoid being tricked by these market moves and make better decisions.