Definition ∞ A cascading sell-off describes a rapid and widespread market decline where initial price drops trigger further selling pressure across various assets. This event occurs when a significant volume of sell orders leads to falling prices, which in turn activates stop-loss orders or margin calls. Such a situation can intensify market panic and accelerate price depreciation.
Context ∞ In digital asset markets, a cascading sell-off frequently results from substantial liquidations of leveraged positions or large institutional sales. This dynamic often leads to pronounced price volatility and investor losses, becoming a prominent feature in crypto news cycles during bearish periods. Understanding this phenomenon is vital for comprehending market downturns and associated risks.
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