RSI above 70 suggests Ethereum could be overbought, potentially leading to a price pullback. If the MACD crosses above its signal line, it indicates a bullish trend. Together, these indicators give traders insight into momentum shifts and potential entry or exit points.
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Flash crashes in cryptocurrency markets are sudden and sharp price drops that can occur within a short time frame, often driven by high volatility, low liquidity, or large sell orders. These crashes can be triggered by a range of factors, including a whale dumping a large amount of assets, automated trading algorithms reacting to market signals, or negative news creating panic selling. In highly leveraged markets, flash crashes can also cause a cascade of liquidations, exacerbating the price drop. While these events are often temporary, they can instill fear in traders and cause erratic market behavior. Flash crashes highlight the risks of the crypto market's lack of liquidity and the influence of high-frequency trading.
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Institutional investors bring significant liquidity and stability to the crypto market, reducing short-term volatility. Their entry into the market often boosts investor confidence and can drive prices higher. However, because they manage large positions, their decisions to buy or sell can create massive price swings. A sudden exit by institutional investors—such as a large liquidation—can trigger sharp declines. Their influence often leads to more predictable trends, as their involvement adds a layer of professionalism, but it can also lead to higher volatility when they adjust positions.
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