Definition ∞ A cryptocurrency selloff describes a rapid and significant decline in the market value of one or more digital assets, typically driven by widespread selling pressure. This event often results from a sudden loss of investor confidence, negative news, regulatory concerns, or broader macroeconomic downturns. During a selloff, prices fall sharply, and trading volumes frequently increase as participants divest their holdings. It represents a period of market contraction and heightened risk aversion.
Context ∞ Cryptocurrency selloffs are prominent news items, signaling periods of market volatility and potential investment opportunities or losses. News reports often analyze the causes of a selloff, such as a major liquidation event or an adverse regulatory announcement, and discuss its potential duration or impact on the wider digital asset market. Understanding the dynamics of a selloff helps market participants interpret price movements and assess market health.
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