How does risk-on sentiment affect the volatility of digital currencies?

1 answers

• May 07, 2022 · 3 years ago
  BYDFi, as a leading digital currency exchange, has observed the impact of risk-on sentiment on the volatility of digital currencies. When there is a positive risk-on sentiment in the market, we often see increased trading volume and higher price volatility for digital currencies. This is because positive risk-on sentiment encourages more investors to enter the market and take on higher risks, leading to increased buying and selling activities. On the other hand, when there is a negative risk-on sentiment, we may see decreased trading volume and lower price volatility as investors become more risk-averse and prefer to hold onto safer assets. It's important for traders to consider the impact of risk-on sentiment when analyzing the volatility of digital currencies and adjusting their trading strategies accordingly. However, it's worth noting that risk-on sentiment is just one of the many factors that can influence digital currency volatility, and traders should also consider other fundamental and technical indicators to make well-informed trading decisions.
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