A Risk Assets Market Shock occurs when investors suddenly move away from high-risk assets like stocks and cryptocurrencies due to economic uncertainty, tight monetary policy, or geopolitical tensions. During such phases, crypto markets often experience sharp volatility and heavy sell-offs.
For crypto traders, the first priority should be capital protection. Instead of chasing profits, traders should reduce position sizes and avoid emotional decisions. Over-leveraging in futures trading is especially dangerous during market shocks, as sudden price swings can easily wipe out accounts.
It is also wise to keep a portion of funds in stablecoins, which provides flexibility to enter the market at better prices once conditions stabilize. During risk-off environments, Bitcoin and Ethereum tend to perform better than altcoins, which usually suffer deeper losses.
Traders should closely monitor macro-economic news, such as central bank policies, bond yields, and global conflicts, as these factors heavily influence risk assets. Rather than trying to catch the exact bottom, waiting for clear trend confirmation—such as improved volume and price stability—is a smarter approach.$BTC
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