Is there no bull market in the cryptocurrency space? Is it because of a lack of liquidity?

Liquidity, in simple terms, refers to how much money in the market is willing to buy and sell.

If there is a lot of money, trading is smooth, and prices are stable; if there is little money, buying and selling is difficult, and prices can skyrocket or plummet.

Where does liquidity come from?

Only with ample money can there be liquidity: institutions and large players entering the market make it active.

Market sentiment: in a bull market, everyone rushes to buy, and liquidity is naturally good; in a bear market, no one is willing to buy, and liquidity dries up.

Trading depth: a lot of buy and sell orders mean strong market liquidity; with few orders, a single buy or sell can crash the market.

Market makers support the market: professional institutions place orders to maintain trading; otherwise, the market can easily collapse.

Macroeconomic environment: when the Federal Reserve injects money, funds flow in, and the market thrives; when liquidity is tightened, the market becomes stagnant.

Consequences of liquidity drying up

Difficult to trade: want to execute a deal? You have to accept outrageous prices.

Scary slippage: a large order can cause prices to plunge directly.

Easily manipulated: major players can scare off retail investors with a single move.

Hard to initiate a bull market: without money to push prices up, no amount of good news will matter.

Will a bull market come again?

The essence of a bull market is new funds entering + market expectations.

Currently, the lack of liquidity does not mean a bull market is impossible; as long as the Federal Reserve injects money, Web3 explodes, and institutions enter the market, it can still revive.

When the money is in place, a bull market can happen.

The team continues to profit, moving forward steadily.

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