Definition ∞ A cryptocurrency crash indicates an abrupt and severe drop in the price of one or multiple digital assets, often resulting in significant losses for holders. This event is typically marked by extreme volatility and a rapid loss of market confidence. Crashes can be precipitated by unexpected market events, major liquidations, or systemic failures within a protocol or exchange. It represents an intensified form of market decline with swift and dramatic price movements.
Context ∞ Cryptocurrency crashes frequently generate extensive news coverage, prompting scrutiny of market mechanisms, risk management practices, and the underlying stability of decentralized systems. The aftermath often involves re-evaluations of project fundamentals and calls for increased regulatory oversight to mitigate future occurrences.
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