A volatility event describes a period of rapid and significant price fluctuations for a digital asset, characterized by large upward or downward movements over a short timeframe. These events are often triggered by major news announcements, unexpected market developments, or sudden shifts in trading volume. They present both opportunities and heightened risks for traders.
Context
Cryptocurrency markets are known for their susceptibility to volatility events, which can be amplified by their relatively smaller market capitalizations compared to traditional assets. News frequently covers these periods, explaining the catalysts and analyzing their impact on investor sentiment. Managing risk during volatility events is a key consideration for participants in the digital asset space.
Low-liquidity perpetual markets remain highly susceptible to whale-orchestrated price manipulation, transferring millions in bad debt to liquidity providers.
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