Question n° 492 ·
How do differences between retail and institutional investor sentiment contribute to Bitcoin price volatility?
- Retail panic and institutional buying decrease Bitcoin volatility by smoothing flows
- Retail panic and institutional buying diverge, driving Bitcoin’s price swings sharply Bonne réponse
- Retail panic and institutional buying always cancel out, stabilizing Bitcoin price
Pourquoi est-ce la bonne réponse?
This is correct because when retail investors react fearfully and sell while institutional investors continue to buy, the imbalance between supply and demand increases volatility. Beginners should learn that contrasting sentiment between smaller retail traders and large institutions can cause sharp price movements as each group acts differently under stress or opportunity.