A must-read for newbies in the cryptocurrency circle: Why did the ALT market "crash"?
For newbies who have just entered the cryptocurrency circle, you may hear a panicking word - "ALT market crash". So, what is going on?
The ALT market is what we call non-mainstream digital currencies, NFTs and other investment products. They are different from traditional stocks and bonds, with greater price fluctuations and more interesting. However, just like a roller coaster, sometimes there will be a sudden "landing"!
So why did such a big crash happen? Let's take a look together:
1. Market sentiment roller coaster: Sometimes, everyone thinks that a certain coin is going to rise, so they all go to buy it. But suddenly one day, everyone thinks it is going to fall, so they start to sell it.
2. The "tightening curse" of government supervision: The government sometimes regulates digital currencies or introduces some policies. .
3. The "stumbling block" of technical problems: Digital currency and NFT are based on some high-tech, but sometimes these technologies will have problems, such as security vulnerabilities or blockchain bugs. It's like you suddenly encounter a big stone while running and stumble. Everyone feels unsafe and starts selling.
4. "Single-plank bridge" with insufficient liquidity: If the buying and selling of a certain coin in the market is not active, it's like walking on a single-plank bridge. If you are not careful, you may fall down. If a large number of people want to sell this coin, the price will fall like a dive.
5. Over-hyped "bubble": Sometimes, the price of some coins is hyped too high, just like blowing a balloon, the bigger it gets, but one day it will burst. When everyone realizes that the price is unreasonable, they will start selling, causing the price to plummet.
6. Macroeconomic environment: Economic downturn, interest rate changes and other factors will affect investors' confidence and behavior. When the overall environment is not good, everyone may choose to sell their investment products, including digital currency and NFT.
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