With $183 million in liquidations taking place in 24 hours, the cryptocurrency market is now quite turbulent. This brings attention to the dangers of trading because prices can fluctuate quickly. Liquidations occur when traders are forced to exit positions owing mostly to unexpected price declines and insufficient margin.
One of the main causes of these liquidations is the usage of leverage in trading. Many investors borrow money to expand their assets, which both elevates possible earnings and increases risk. Automatic liquidations could result if the market goes against them as they might lose more than they invested. Many traders must have closed their positions as a result of recent sharp declines in asset values.
Cryptocurrency prices are much influenced by market mood. Quick price swings can be caused by news on regulations, economic trends, and shifts in investor sentiment. Moreover affecting cryptocurrency investment, increasing interest rates make conventional assets more appealing.
With price fluctuations occurring anytime, the 24/7 trading of cryptocurrencies increases their volatility. All things considered, the volatility stresses investors' need of prudence, knowledge, and ready for possible market ups and downs.#Write2Earn