What are corrections and why does that make a coin's price go down after the rise?
>>2424819
a correction is when a coin is overvalued or undervalued and the market shifts its price to more accurately represent the true value of the coin
when a coin gets a ridiculous surge in price, it is mostly due to hysteria/hype and very rarely organic growth in actual value
>>2424819
You belong in your home so you run there as fast as you can. You overshoot your house and wind up in the yard. You turn around and walk back to your front door. You open the door and walk to the basement door. You open the basement door and throw yourself down the stairs. You're dead now. You've corrected.
Perception of value.
You ever get hyped up about something and then realize it's not the bee's knees? When you sober up, you may think it's overvalued and sell it.
Lots of people doing that at once causes a sell off and a crash.
It's the price "correcting" to more accurately reflect what the price should be. Sharp rises usually happen because people see the price moving up and want to jump on the profit train, when it peaks and people star selling the same momentum happens but reversed.
>>2424819
> People buy stuff.
> Demand increases
> Price increases.
> Stuff gets too pricey so people stop buying
> People start to sell to cash out their profits
> Supply increases
> Price decreases
> New price is somewhere in the middle
>>2424849
>opened the door
>didn't get on the floor
>didn't walk the dinosaur
Ya missed a sitter