Fractal Finance

Fractional reserve lending in crypto refers to the practice where financial institutions hold only a fraction of deposits as reserves, enabling them to lend out more funds than they actually possess. This process increases liquidity and credit creation in the market.

Fractal finance refers to the idea that financial systems can be understood through repeating patterns at various scales. In this approach, trends and behaviors observed in smaller markets can resemble those in larger ones. This concept can be applied to price movements, trading strategies, and market dynamics.In cryptocurrency, fractal analysis looks for similarities in price patterns across different timeframes. For example, a short-term price drop might mirror a bigger trend seen over weeks or months. Traders use these patterns to make predictions, identifying potential entry and exit points based on historical behavior.This method also aligns with the broader theory of fractals, where complex shapes are built from simple, repeating structures. By recognizing these patterns, participants hope to gain insights that could lead to more effective trading decisions. Ultimately, fractal finance offers a unique lens through which traders evaluate market conditions and potential opportunities.

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