Bitcoin’s halving event reduces the rate at which new coins are mined, historically triggering price increases due to supply constraints. However, other factors like demand, market sentiment, and global economic conditions also influence the price trajectory.
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Bitcoin often leads the cryptocurrency market, with many altcoins closely following its price movements. When Bitcoin experiences a sharp rise or fall, it usually causes altcoins to move in the same direction, albeit at varying intensities. This correlation can reduce the effectiveness of portfolio diversification in crypto investing since price movements across different assets might not be independent. However, in a highly volatile market, certain altcoins that are less correlated with Bitcoin can offer diversification opportunities, potentially minimizing risks. By analyzing correlations, investors can optimize their portfolios for both growth and risk management.
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Large buy orders at key support levels suggest strong demand and may lead to price stabilization or upward movement. Similarly, large sell orders near resistance levels act as price barriers. If a significant buy order is absorbed, the price may rise, breaking through resistance. Conversely, a sell order being filled can cause a downward move. Monitoring the order book for these large orders helps traders identify areas of support and resistance, giving them clues about potential price breaks or reversals.
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