Question #347 ·
How can China’s reaffirmation of its cryptocurrency ban influence Bitcoin market sentiment?
- It boosts retail investor confidence due to perceived regulatory clarity.
- It encourages institutional investors to increase their accumulations.
- It heightens uncertainty, increasing fear and potential selling pressure among investors. Right answer
Why is this the correct answer?
This is correct because when a major economy like China reaffirms a ban, it sends a negative signal globally. Beginners should know that regulatory crackdowns often shake confidence, leading traders to sell or avoid taking new positions until clarity returns.