DeFi tokens are often influenced by changes in Total Value Locked (TVL). Rising TVL typically signals increased liquidity and a healthy ecosystem, which can drive up token prices, while a drop in TVL may cause bearish trends.
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Regulatory shifts can have a significant impact on the crypto market, either boosting or dampening investor confidence. Positive regulations, like clearer tax guidelines or legalization of crypto in certain regions, can increase adoption and drive prices up. Conversely, negative news, such as government crackdowns or bans (e.g., Chinaβs crypto ban), can lead to sharp declines in prices and market instability. The uncertainty around regulations often causes volatility, as investors react to the possibility of stricter controls or government intervention.
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Large buy orders near key support levels or large sell orders near resistance levels can act as price barriers. When a significant buy order is placed, it may indicate strong demand at that price point, potentially leading to price stabilization or a reversal. Conversely, large sell orders can suggest resistance, signaling a possible price drop. Observing the order book depth and how these large orders are filled can give traders insights into the market's direction and potential breakout or breakdown points.
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