Part 5/9:
As traders leverage their positions, attempting to capitalize on price movements, further contractions can occur during market corrections. When profits lead to overconfidence, a detrimental cycle of liquidation can unfold, causing substantial price drops that exceed market participants' expectations.
Interestingly, these bear market crashes are typically short-lived. They create buying opportunities as many investors look to capitalize on the dip. The convergence of new and existing investors who believe in the underlying value of cryptocurrencies tends to provide a safety net for prices, pushing them back up before a recovery.