what makes crypto price drop
what makes crypto price drop
im pretty new to crypto and a lot of the times i see nearly 80% of people shorting a crypto so in theory if the crypto falls in value it will lose a lot of money but it still does drop by over 70% down or similar numbers which doesn’t really make much sense to me. i heard in binance crypto coins are connected so in that way it could give away those lumps of money but is that really the only reason it lets the majority profit?
If everybody is waiting for QT and there are news that FED decided against that – chart is red.
Just because it looks like 80% of people are short doesn’t mean they’re holding real conviction. A lot of traders are hedging, market making, or using delta neutral strategies where the short is a tool.
Then there’s the role of liquidation cascades and margin. When price drops even slightly, overleveraged longs get liquidated, which sells more of the asset, pushing price further down, triggering more liquidations. It’s a death spiral. Binance and other exchanges don’t care who profits. They make money on the fees and liquidation penalties. If the market’s lopsided and everyone’s short, that might reflect sentiment but not actual exposure.