Large institutional investors entering the crypto market often amplify volatility due to their significant trades and market influence. Their involvement brings more legitimacy, potentially boosting prices in the long term. However, when institutions move large sums, it can cause sharp price swings, as they might react to macroeconomic factors or adjust their portfolios rapidly.
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Slippage refers to the difference between the expected price of a trade and the actual price when it is executed. It often happens in volatile markets, where prices can move quickly between the time an order is placed and when it is completed. In cryptocurrency trading, slippage can be especially significant during times of high volatility or low liquidity, such as in smaller or newly listed tokens. It can result in traders paying more for a purchase or receiving less on a sale than they intended. To minimize slippage, traders can use limit orders instead of market orders, and some platforms allow setting slippage tolerance levels to prevent excessive price deviations during execution.
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To determine if a cryptocurrency project has real utility, examine how the token is used within its ecosystem. Does it serve a practical purpose, such as enabling transactions, staking, governance, or accessing services? Check if the project’s technology solves a real-world problem and has the potential for adoption. Research its partnerships and integrations with other platforms, as this indicates real-world applications. Projects with actual use cases are more likely to sustain value over time compared to those based purely on speculation. Community engagement also helps gauge whether people find value in the project’s offering.
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