How does overall market sentiment help us understand Bitcoin price changes?
Why is this the correct answer?
Market sentiment reflects how investors feel about Bitcoin at a given time—whether they are optimistic or pessimistic. When overall sentiment is positive, more people tend to buy, pushing the price up. When sentiment turns negative, fear sets in and more people sell, driving the price down. By tracking sentiment indicators, beginners can better understand why Bitcoin prices rise or fall beyond just technical charts or news headlines.
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