Airdrops can spark short-term interest, but the true value of the tokens depends on the project's long-term potential. Tokens from projects with strong use cases, active communities, and solid roadmaps are more likely to maintain value over time.
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Flash crashes are sudden, sharp declines in the price of a cryptocurrency, typically driven by high-frequency trading, market manipulation, or liquidity shortages. These rapid price drops can create panic among traders and investors, leading to a cascade of sell-offs. The lack of liquidity in certain markets, especially with smaller or newer coins, can exacerbate these crashes. Flash crashes can cause significant short-term volatility and may distort price discovery, making it harder to assess an asset’s true market value. They can also discourage retail investors, increase market uncertainty, and make the crypto market seem less stable, despite its long-term potential.
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Large institutional investors bring significant liquidity to the cryptocurrency market, which can reduce short-term volatility and stabilize prices. Their entry often boosts market confidence and attracts other investors, driving prices upward. However, when institutional investors liquidate positions or pull back, it can lead to sharp price declines due to their sizable market impact. As institutions typically hold large amounts of assets, their decisions influence the broader market trend, making their actions critical in shaping both short-term volatility and long-term price trends in the crypto space.
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