Definition ∞ Exchange Selling Exhaustion describes a market condition where the supply of assets available for sale on exchanges has significantly diminished. This situation typically occurs after a prolonged period of selling pressure, indicating that most market participants who intended to sell their assets have already done so. When selling pressure subsides, the market may become more receptive to price increases due to a relative scarcity of available supply. It often precedes a potential price reversal or a period of accumulation, as fewer sellers remain to drive prices lower.
Context ∞ Traders and analysts frequently monitor indicators related to Exchange Selling Exhaustion as a signal for potential market bottoms or upcoming upward price movements in cryptocurrency markets. A key aspect to watch involves analyzing exchange order books and on-chain metrics to verify the reduction in sell-side liquidity. The presence of this condition suggests a shift in market sentiment, moving from fear-driven selling to a more stable or demand-driven environment.
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