Definition ∞ Demand collapse describes a rapid and substantial reduction in buyer interest for an asset or service. This situation leads to a sharp decline in price and trading volume. It signifies a severe imbalance where supply significantly exceeds available purchasing power. Such an event can precipitate market instability and investor losses.
Context ∞ Demand collapse is a critical topic in cryptocurrency news, often following periods of speculative excess or adverse regulatory actions. Recent discussions focus on specific digital assets experiencing rapid value depreciation due to shifting market sentiment or fundamental project weaknesses. Understanding its causes is crucial for anticipating market downturns.
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