“Falling knife” refers to a situation where the price of an asset, such as a cryptocurrency, is rapidly declining. Investors often face a dilemma about whether to buy in this environment, hoping to catch the asset at a low price. However, doing so carries significant risk.The term comes from the idea that trying to “catch” a falling knife can lead to injury—similarly, investing during a steep decline can result in further losses. Investors may misjudge the bottom, causing them to buy before prices have stabilized or recovered.Many suggest that it’s better to wait for signs of a turnaround before entering a position. Strategies such as analyzing trends, looking for support levels, or waiting for positive news can help in making informed decisions. In summary, approaching a falling knife situation with caution can be crucial to avoid potential financial harm.