#MarketPullback
A crypto market correction is a temporary decrease in the value of cryptocurrencies after a significant increase in their price. This is a natural process in financial markets, including cryptocurrency, which occurs due to market overheating or a change in investor sentiment.
Key features of a correction:
1. Temporality: A correction usually lasts from several days to several weeks, but is not a long-term decline (like a bear market).
2. Size of the drop: Typically, a correction reduces the price of an asset by 10-30% from the last maximum.
3. Causes:
Investors locking in profits after a rapid increase.
Excessive optimism or market overheating.
Negative news that affects confidence in the crypto market.
Technical factors related to price charts.
4. Role in the market: A correction is a healthy phenomenon, as it helps reduce speculative pressure and stabilize prices.
What to do during a correction?
Long-term investors often hold assets, perceiving the correction as an opportunity to buy at lower prices.
Traders can use short-term fluctuations to make a profit, but the risks increase during this period.
