The actual trigger is when someone influential decides “this is far enough - I’m pulling my money out before it all vanishes.” This doesn’t have to be such a dire thing - investors are constantly saying “this is enough, I’ve done well in this, time to take the profits and move my money elsewhere.”
Others see the influential figure doing that and begin to get scared. Many follow. And this becomes a chain reaction when the market at large sees this trend. If it’s enough people, and there’s enough doubt looming out there, it will chain and take the entire market down. If there’s not, it will stabilize. Small corrections happen all the time.
It’s a very basic human thing. If you were in a room and everyone else in it suddenly screamed and ran away you would follow them and figure out why later.
The actual trigger is when someone influential decides “this is far enough - I’m pulling my money out before it all vanishes.” This doesn’t have to be such a dire thing - investors are constantly saying “this is enough, I’ve done well in this, time to take the profits and move my money elsewhere.”
Others see the influential figure doing that and begin to get scared. Many follow. And this becomes a chain reaction when the market at large sees this trend. If it’s enough people, and there’s enough doubt looming out there, it will chain and take the entire market down. If there’s not, it will stabilize. Small corrections happen all the time.
It’s a very basic human thing. If you were in a room and everyone else in it suddenly screamed and ran away you would follow them and figure out why later.