🚨🚨🚨🚨🔻 Main Reasons for the Decline in Cryptocurrency Prices
1. Movements in the Global Economy
U.S. Federal Reserve Decisions (Interest Rate Hikes): Rising interest rates make investors prefer traditional assets (bonds and dollars) over high-risk cryptocurrencies.
Strength of the U.S. Dollar: When the dollar strengthens, prices of dollar-denominated assets such as cryptocurrencies and gold decline.
Recessions or Economic Crises: Push investors to sell risky assets (cryptocurrencies) and seek safety (dollar, gold).
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2. Supply and Demand within the Market
Massive Sales by Whales: When large investors sell huge amounts of cryptocurrencies, the price collapses rapidly.
ETF Pressure: Withdrawals or sales from Bitcoin and Ethereum funds may pressure the market.
Decreased Liquidity: The lower the trading volumes, the more susceptible the price is to sharp fluctuations.
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3. Organizational and Political Events
Ban or Tightening Decisions: Such as banning mining or restricting trading platforms in certain countries (China as an example).
Absence of Clear Regulations: Creates uncertainty and scares institutional investors.
Negative News about Companies: Collapse of platforms (like FTX previously) or liquidity issues weaken market confidence.
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4. Technical Factors (Technical Analysis)
Breaking Strong Support Levels: When the price drops below an important support level, selling accelerates further.
Market Fear Indicators (Fear & Greed Index): When fear increases, investors sell to protect their profits.
News about Security Breaches: Hacking of wallets or platforms may lead to panic selling.
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5. Psychological and Behavioral Factors
Panic Selling: Negative news or rapid decline leads to indiscriminate selling.
Rumors and Media Misinformation: News about company bankruptcies, or rumors about banning cryptocurrencies.
Domino Effect: When a large number of investors sell, others follow out of fear of greater losses.
