SUDDEN DIPS AND PUMPS - HERE IS WHY?

Yes, sudden dips followed by quick recoveries (pumps) are common in financial markets, especially in crypto. Several factors can cause this. Let's explore them below:

- Liquidations & Stop Losses – A sharp dip can trigger stop losses and liquidations of leveraged positions, causing a cascade effect. Once selling pressure eases, the price rebounds.

- Market Manipulation (Whale Activity) – Large traders ("whales") may dump assets to trigger stop-loss orders and then buy back at a lower price.

- Low Liquidity – If there's not much trading volume, small sell orders can cause large price drops, which are then corrected when buy orders come in.

- News & Sentiment – Sudden negative news can trigger panic selling, but if the news turns out to be less impactful, the price recovers.

- Algorithmic Trading – Bots react to price movements, sometimes amplifying dips and rebounds.

- Support & Resistance Levels – Price often bounces off key technical levels where buyers step in after a drop.

So, while it may seem dramatic, these movements are part of market behavior. Traders often use these opportunities to enter positions strategically.