@robertlemelinrh
Liquidity crises on exchanges often trigger sharp Bitcoin price swings. When liquidity dries up, even moderate-sized orders cause outsized volatility due to thin order books. This can lead to cascading liquidations as stop-loss orders and leveraged positions are triggered. Fear spreads quickly as traders worry about solvency, further reducing trust and inflows. Conversely, opportunistic traders may exploit the crisis by buying dips, leading to temporary rebounds. Overall, liquidity issues amplify short-term volatility, create panic selling, and undermine confidence, though long-term Bitcoin fundamentals usually remain intact once liquidity returns and exchange operations stabilize.
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