Why the bull market falls: There are many reasons for the market to rise, but the factors that cause the market to fall can usually be easily categorized as follows:
Interest rate changes: If major central banks around the world raise interest rates, funds may flow out of risky assets and turn to more stable investments, causing the price of the cryptocurrency market to fall.
Global economic uncertainty: Uncertainties such as geopolitical events or global economic recession, such as war or poor economic data outlook, may lead to increased risk aversion among investors and affect market sentiment. Regulatory risks
Government regulatory policies: The cryptocurrency market still faces regulatory risks from governments around the world, and any major regulatory policy changes may have a significant impact on market prices.
Exchange compliance risks: Compliance and operational issues of major exchanges, such as hacker attacks or misappropriation of funds, may also trigger market panic and cause prices to fall. Market internal factors
Market sentiment fluctuations: The cryptocurrency market is known for its high volatility, which can lead to sharp price fluctuations whether due to FUD (fear, uncertainty and doubt) or other reasons. Rapid shifts in investor sentiment often trigger sharp price fluctuations, especially during the retracement period of a bull market.
Liquidity risk: The liquidity of the cryptocurrency market is relatively low. In the case of unstable market sentiment, the flow of large amounts of funds may cause large price fluctuations. Insufficient liquidity may cause prices to fluctuate dramatically in a short period of time, and even further lead to continuous liquidation of assets, thereby amplifying market volatility.
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