Definition ∞ An extreme bearish phase describes a prolonged period of severe and widespread price declines across a market or specific asset. This market condition is characterized by intense selling pressure, low investor confidence, and a prevailing sentiment of pessimism, often leading to significant losses for asset holders. Prices consistently trade below key moving averages, and recovery attempts are typically met with further downward movements. Such phases can persist for extended durations, testing the resolve of even long-term investors.
Context ∞ During an extreme bearish phase, market participants often seek shelter in stable assets or exit positions entirely, exacerbating price drops. Fundamental news, even if positive, frequently fails to halt the downward trajectory as fear dominates trading decisions. Identifying the end of such a phase often requires a clear shift in market structure and a sustained return of buying interest, signaling a potential reversal.
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