Fear-based investor behavior, like panic selling, increases volatility and accelerates price drops. It can also trigger cascading liquidations in leveraged markets, deepening the downturn.
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Tight regulations may drive capital to friendlier jurisdictions, causing “capital flight.” Clear, supportive rules attract investment and foster innovation. Investors respond quickly to shifts in regulatory tone.
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To evaluate scalability, start by examining the project's underlying blockchain or consensus mechanism. Does it support high transaction throughput, or are there scalability solutions like layer-2 technologies or sharding in place? Look at the project’s approach to network congestion—can it handle growth without sacrificing speed or security? Review the team’s plans for scaling over time, such as roadmap updates or infrastructure expansion. Projects that can seamlessly handle more users and transactions as they grow are better positioned for long-term success and adoption.
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