The volatility observed in Bitcoin markets stems primarily from excessive leveraging within unregulated cryptocurrency exchanges, notably on platforms like @Binance . Price fluctuations are often driven by manipulative tactics aimed at liquidating leveraged positions, resulting in sharp spikes and drops.
The liquidation process initiates a cascade effect, where forced market selling (in the case of long positions) or buying (in the case of short positions) exacerbates the volatility. These maneuvers, known as liquidation laddering, amplify the market movements.
Addressing this extreme volatility necessitates regulatory intervention to curtail high leverage practices. However, the global nature of these exchanges, coupled with regulatory challenges, presents a formidable obstacle to effective oversight.
@Binance ,as a dominant player controlling a significant portion of this market, benefits from the heightened volatility generated by leveraged trading, despite its adverse effects on market stability. Spot transactions, by contrast, exert minimal influence on this overarching volatility trend.
