"Why is cryptocurrency dropping after a strong rise? Here's what you need to know"
After a week of green candles and positive sentiment in the cryptocurrency market, it is now cooling down — what caused the drop?
The recent price drop is mainly caused by profit-taking. Traders are locking in gains after a successful rise, especially after:
Low inflation readings in the US, which initially boosted risk assets
Strong earnings from Chinese tech giants, bringing optimism to global markets
Progress in trade relations between the US and China, easing investors' concerns
But after any rise, some correction is normal. Think of it as the market taking a break.
What to watch for:
BTC and ETH are holding key support levels
Will macroeconomic trends (such as Fed policy or inflation data) continue to support risk assets
New narratives in AI tokens, Layer 2, or Web3 infrastructure projects
Professional advice: Don't panic and sell in a panic. Step back, stick to your plan, and keep learning.