If you're a cryptocurrency investor, you've probably wondered why is crypto down. The price of Bitcoin, for example, regularly goes up and down by up to 5% in a day. That's pretty crazy, especially when you consider that stock indices rarely experience such drastic fluctuations. But what's really happening behind the scenes of crypto? While there's no single answer to this question, you can take steps to improve your odds of making the best decisions for your portfolio.
Various factors contribute to crypto's price movement. For instance, macroeconomic factors, such as inflation, can affect investor confidence in risky alternative assets. Inflation, for example, can force investors to withdraw their cash from cryptocurrencies in favor of safer investments, such as savings accounts. Additionally, government actions can lead to pessimism among investors, which will further drive down the price of crypto. In addition, the lack of liquidity may cause some coins to fall by a large margin, causing investors to move out of these investments.