Definition ∞ Conviction Holders Selling describes a market event where long-term investors, typically those with strong belief in an asset’s future value, begin divesting their holdings. This behavior suggests a fundamental shift in their perspective, often triggered by significant negative news or altered market conditions. Such sales can exert substantial downward pressure on an asset’s price, indicating a potential loss of confidence among a crucial segment of the investor base. It represents a notable change from holding patterns.
Context ∞ In cryptocurrency markets, conviction holders selling is a key indicator of market sentiment and potential price reversals. When investors who have held digital assets through previous market cycles begin to sell, it often signals deep-seated concerns about the asset’s long-term viability or the broader market outlook. This phenomenon can accelerate price declines and contribute to sustained bearish trends, making it a critical metric for market analysts monitoring digital asset stability.
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