🟠 Answer: Yes, the digital currency market can go through general recessions without exception, which is common in financial markets in general, including the digital currency market. This recession usually occurs as a result of a set of economic or psychological factors that affect the market as a whole.
◻ The most important of which are:
🔸️1. Low liquidity in the market
When trading volume is significantly reduced, it becomes difficult to move the market. This often happens during holidays or when waiting for important news or events.
🔸️2. Lack of influential news
Negative or positive news is the main driver of market movements. If there is a period without influential news, the market may remain calm.
🔸️3. Market trend for correction
After a period of strong ups or downs, the market may go through a “consolidation” phase where the movements are weak within a narrow range.
🔸️4. Economic or geopolitical concerns
These concerns could lead to investors becoming risk averse, reducing trading in cryptocurrencies.
🔸️5. Seasonal time periods
There are periods of the year when market activity is low, such as the summer months or the end of the year.
🔺️ How do you deal with market recession?
🔸️Focus on technical analysis: During periods of stagnation, price ranges can be monitored to identify support and resistance points.
🔸️Re-evaluation: Take the opportunity to evaluate your portfolio and investment goals.
🔸️Short-term trading: Small movements may be an opportunity to profit through active trading.
🔸️Prepare for opportunities: Downturns often precede strong moves. Be ready to make decisions when trends emerge.
If you are a long-term investor, downturns are not necessarily a negative, but may be an opportunity to rebalance your portfolio or increase positions at lower prices.
