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Market health Meaning

A holistic assessment of whether a market is functioning correctly. A "Healthy" market has high liquidity, balanced participation between "Retail" and "Institutions," low "Manipulation," and "Organic" volume that isn't just bots trading with each other (Wash Trading).

Indicators of poor market health include "Decoupling" (where the price moves for no reason), "Flash Crashes," and "Extreme Funding Rates" (which suggest the market is dangerously over-leveraged). If a market is "Unhealthy," it is prone to sudden, violent collapses that can't be explained by news.

Regulators and exchange operators monitor health to ensure "Fairness." For an investor, trading in a healthy market is much safer, as technical analysis and fundamentals are more likely to "Work." In an unhealthy market, the price is at the mercy of "Whales" and "Exploits," making it more like a casino than an investment.

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