Definition ∞ Deep loss selling describes the liquidation of digital assets by investors at prices substantially below their initial acquisition cost. This action is typically motivated by a desire to exit positions during severe market downturns or to realize tax losses. It represents a period of significant investor distress and capitulation. This behavior contributes to pronounced downward price pressure.
Context ∞ Periods of deep loss selling often mark significant phases in cryptocurrency market cycles, indicating a potential cleansing of weak market participants. Analysts frequently monitor these events as possible precursors to market stabilization or a trend reversal. News reports may highlight these selling patterns when discussing the severity of market corrections and potential turning points.
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