Description: Market risk refers to the possibility of financial losses due to changes in market prices. This risk is particularly relevant in the context of financial markets, as assets can experience high volatility, leading to significant price fluctuations over short periods. Such volatility can result in considerable losses for investors. Market risk affects not only individual assets but can also influence the performance of platforms and services that rely on price stability, such as those in traditional finance and decentralized finance (DeFi). Additionally, market risk can be amplified by external factors such as regulatory changes, macroeconomic events, or technical issues. Therefore, participants in these ecosystems must be aware of market dynamics and how they can impact their investments and operations. Managing market risk has become an essential part of investment strategy, where users employ tools like stop-loss orders, diversification, and technical analysis to mitigate potential losses.
