Definition ∞ The greed phase in financial markets denotes a period characterized by excessive optimism, speculative buying, and a strong desire for quick profits among investors. During this phase, asset prices may rise rapidly, often detached from underlying fundamentals. This sentiment can lead to overvaluation and increased market risk. It often precedes market corrections.
Context ∞ In cryptocurrency news, references to a “greed phase” often accompany discussions of rapid price surges and heightened trading activity for digital assets. Debates center on whether market valuations are sustainable or if they indicate an impending correction. A critical future development involves discerning whether investor behavior matures to mitigate extreme greed-driven cycles.
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