Crypto market crashing is a situation where the price of almost all the coins crashes simultaneously.
So the Crypto market crash is a downtrend in the cryptocurrency market.
In this article we will explain why crashes take place and what are possible reasons for crashes in the cryptocurrency market.
If an investor or trader in the cryptocurrency market can identify the factors or indications prior to the market crash then he can easily save his Investment portfolio in cryptocurrency easily.
Now we will explain why are cryptos crashing.
Factors Which Are Responsible For Cryptocurrency Market Crash
There are many factors which are responsible for the cryptocurrency crash today.
In the cryptocurrency market reasons and factors which are responsible for crash in cryptocurrency are multiple. But here we will include only those factors which are usual factors.
Negative News & Hypes
There are a number of websites and a number of social media influencers who can spread information and news within minutes to millions of people.
Money is a big need for almost every person in the present time.
Many rich people in the cryptocurrency field use this compulsion of money need by these influencers and websites.
When these rich people want to buy a particular coin then they spread some negative facts and news regarding that crypto coin and that makes it dump the price of that coin.
This strategy of buying coins at a low price is very common and traditional.
When few big whales of cryptocurrency think about buying multiple coins at low price then they use this same technique at a high level.
So the fake news and hype technique are responsible for cryptocurrencies crashing in the cryptocurrency market.
Many people think that this traditional technique to dump the cryptocurrency market is just an assumption. But here we would like to tell you that it is not an assumption.
We can give many proofs about this activity of fake news and hype to crash the cryptocurrency market easily.
Here we can see the most recent example like spreading negative news about cryptocurrency bans by news websites in India. This fake news hype of ban was exposed by few good Influencers and websites later. Actually many big whales were trying to crash the cryptocurrency market by spreading the old update about Bitcoin and cryptocurrency ban news.
So here we suggest everyone, don’t follow any type of fake hype and news blindly.
Always do research yourself whether the spreading news is really true or not.
Here in this field of cryptocurrency market everyone is mature by age, So everyone in this field can do research at their best.
Related: Common mistakes that should be avoid by beginners in cryptocurrency field of investment.
Influence By Big Experienced Traders And Services
Many new traders in this cryptocurrency field think that an old and experienced trader can’t be wrong. So almost everyone who doesn’t know about actual things behind the market up and down gets into excitement and panic easily.
Here we can take a very simple example of CEO of Binance Exchange.
@CZ_Binance Twitter account tweeted a posted ” I don’t own #Doge or #Shib bla bla bla” .
After this post people who invested their money in DogeCoin and SHIB coin started selling and this resulted into a big dump in DogeCoin and SHIB coin marketm( not much in case of SHIB, Recovered in small time}.
In the present time 11 May 2021, a crash already took place and this twitt of @CZ_Binance resulted in a big dump in two mentioned coins than any other coin.
Actual meaning of the tweet was to enable people to invest in cryptocurrency coins with proper understanding and knowledge.
But many people took this tweet blindly in a negative way.
After the whole situation another tweet posted by @CZ_Binance ” In this Decentralized world different people can create, promote and like different coins. You have your choice too. You can choose what you wish to buy.
So here the whole context is about our understanding that we should not go with anything blindly. Whether it is hype or advice by any celebrity or expertise.
New Decision Or Rule About Cryptocurrency Usage
This is the most important factor which is responsible for the dump in the cryptocurrency market.
Every person who is in this world of cryptocurrency knows how the market of crypto is growing and how people are gaining lots of profit with small efforts and Investment.
This simplicity in cryptocurrency buy sell and growing money is becoming a big problem for bank industries. People are moving their funds from the stock market and bank account to the crypto market.
And in the long term people are making money.
These types of decisions by the common man is responsible for big losses for banks. Because they are not getting money in their bank company so that they can’t do business in real-estate at a good level.
These types of things forcing banking industries to force Governments to make new rules so that people don’t try to go with cryptocurrency Investment.
These new rules and regulations news about cryptocurrency usage result in panic in mind of new investors and can sometimes result in panic sell of cryptocurrencies.
Examples of this fact can be seen in the recent past. Where the US government decided to increase the tax by double
than what was the existing tax system. And this causes a small dump in the cryptocurrency market.
Take Benefit From These Types Of Factors Which Are Responsible For Cryptocurrency Market Crash
All factors that we explained above in paragraph are the most common factors which are responsible for the dump in the cryptocurrency market.
If someone can identify these factors easily before all people in the cryptocurrency market then that person can make lots of profit easily in a small interval of time.
If anyone wants to make profit from the cryptocurrency market crash then it is better to remain active in the cryptocurrency field regarding news and updates about new projects success and failure.
We should keep our eye on every negative thing which is hyped or overhyped by those people who have a very high number of followers and popularity.
After any bad news or negative updates about cryptocurrency related projects/coins, sell your coin instantly and wait for a dump. After the dump , buy that coin again.
In this way, a dump or crash in the crypto market of cryptocurrency can give lots of profit easily.
If you want to know about how to make a profit from the dump/crash in the cryptocurrency market then read about it here, we explained all about the dump and crash in the cryptocurrency market. And also we explained perfectly, how to make profit from after the dump in the cryptocurrency market.