Why the Market Experiences a Sharp Decline

Market downturns in crypto usually originate from unfavorable changes in the global economic conditions. When interest rates are high, inflation remains uncontrolled, or economic uncertainty arises, investors tend to reduce their exposure to risky assets. Crypto, still viewed as a speculative asset, is often among the first to be affected.

These pressures are then reflected in Bitcoin's movements. As the largest market cap asset and market benchmark, Bitcoin's decline triggers a chain reaction. Altcoins and meme coins, which tend to be more volatile, also weaken, often with larger percentage drops.
In the derivatives market, high leverage usage accelerates the price fall. When support levels are broken, mass liquidations occur. Long positions are forcibly closed by the system, creating additional selling pressure that causes prices to fall even faster in a short period.

This situation is often exacerbated by negative sentiment, such as regulatory issues, bad news from the crypto industry, or large-scale sell-offs by big investors. Ultimately, this series of events forms a sharp market correction, which, although painful, is part of the natural market cycle following previous upward periods.
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