Asset Price Volatility describes the degree of variation in a digital asset’s price over a period. This metric quantifies the rapid and often unpredictable price fluctuations observed in cryptocurrency markets. High volatility indicates significant price swings, presenting both opportunities and elevated risks for participants. Understanding this metric is essential for assessing market stability and potential investment outcomes.
Context
Cryptocurrency news frequently reports on asset price volatility, as it significantly influences market sentiment and trading strategies. The ongoing discussion revolves around the impact of macroeconomic events, regulatory announcements, and technological advancements on market stability. Future considerations include the potential for sophisticated risk management tools to mitigate extreme price movements.
A systemic design flaw permitting extreme leverage on low-liquidity assets enabled an attacker to inflict a $4.9M loss via calculated market manipulation.
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