Warning: Year-End Crypto Trading Risks Due to Low Liquidity
The end of the year is always a sensitive time for the crypto market as liquidity significantly decreases. The main reason is that many investors and large institutions pause trading to prepare for the holiday season, causing overall trading volume to decline.
Under low liquidity conditions:
• Price volatility: Prices may fluctuate more than usual, making it easy for uncontrolled “pump” or “dump” events to occur.
• Higher trading costs: Spreads (the difference between buying and selling prices) may widen, increasing trading costs.
• Higher liquidation risk: Leveraged positions are more susceptible to liquidation in a highly volatile and illiquid market.
Advice:
• Limit the use of high leverage.
• Closely monitor market fluctuations.
• Prioritize trading major coins with good liquidity such as $BTC $BNB and $ETH .
Always trade cautiously and manage risk tightly, especially in this challenging year-end period!