Definition ∞ Buyer demand collapse describes a rapid and significant reduction in the willingness or capacity of market participants to purchase an asset. This sudden decline in purchasing interest typically leads to sharp price depreciation and increased selling pressure. It indicates a severe shift in market sentiment, often triggered by adverse news, regulatory actions, or broader economic contractions. Such an event can quickly alter market structure.
Context ∞ The current market landscape frequently considers buyer demand collapse in the context of macroeconomic shifts, such as rising interest rates or liquidity tightening, which reduce capital available for speculative assets. Debates often address whether specific digital assets possess sufficient utility to withstand such events or if they remain highly susceptible to sentiment-driven sell-offs. Monitoring indicators of institutional and retail buying pressure remains critical for assessing market stability.
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