In recent hours, there has been a global decline in many popular cryptocurrencies. Undoubtedly, this brings a strong sense of desperation and highlights the volatile nature of the cryptocurrency market, along with other contributing factors.
Should we sell before it’s too late?
The answer is no. While these signs may concern many and suggest a continuous decline of major cryptocurrencies, the truth is that these movements have explanations. Instead of triggering panic, they should be seen as opportunities to invest at lower prices. Do not panic and sell everything out of fear of losses.
What has caused this general decline?
Many factors can influence a highly volatile market, such as the failure of internal projects, high levels of leverage, the strengthening of other currencies, and more. But without a doubt, the strongest factors are fear, uncertainty, and liquidation by whales.
For those unfamiliar, whales are key players in the cryptocurrency world. They are individuals who purchase large quantities of one or several types of currencies, meaning any movement they make can trigger an upward or downward trend in the market.
In this case, the most famous cryptocurrency,
$BTC , reached an all-time high of $103,000 but experienced fluctuations and later dropped to $98,015. This decline pulled down other major cryptocurrencies, except for a few that managed to hold steady or mitigate the impact.
What factors caused this volatility?
Primarily,
$BTC struggled to maintain its position above $100,000, which created selling pressure. The sale of $40 million worth of BTC by the government of Bhutan and the liquidation of over $100 million by certain whales contributed to the price drop. Additionally, the liquidation of more than 204,000 positions increased volatility. This demonstrates the potential impact of even the smallest investments and highlights how fear and negative news affect the cryptocurrency world. Such events trigger fear of losses, causing people to sell, which sets off a chain reaction dragging others to sell and resulting in even greater losses.
This underscores the importance of financial education and staying informed. The cryptocurrency market is highly volatile and sensitive to various factors, so it’s essential for everyone to keep this in mind when investing.
Undoubtedly, one of the best pieces of advice I can give you is: Do not miss out on the opportunities presented by bearish occasions. It’s the best time to buy the cryptocurrency that suits you at a good price.
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