Definition ∞ Institutional profit taking occurs when large financial institutions sell portions of their digital asset holdings to realize gains after a period of price appreciation. This action involves converting assets back into fiat currency or other stable investments. It is a common strategy to secure returns and manage portfolio risk. Such selling can temporarily increase market supply.
Context ∞ Reports of institutional profit taking are frequently discussed in crypto news, especially after significant market rallies. While it can exert temporary downward pressure on prices, it is often viewed as a normal market cycle event. Understanding this behavior helps differentiate healthy market corrections from more severe downturns, offering essential context for market analysis.
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