Definition ∞ Investor conviction fading describes a diminishing belief among market participants in the future price appreciation or fundamental strength of a digital asset. This phenomenon is often characterized by reduced buying activity, increased selling pressure, and a general hesitancy to hold assets during price declines. It suggests a loss of confidence in an asset’s long-term prospects or its ability to recover from market downturns.
Context ∞ News articles frequently cite investor conviction fading to explain periods of market stagnation or sustained price drops in the cryptocurrency space. This trend can be observed through on-chain metrics like decreased accumulation by long-term holders or a rise in dormant supply becoming active. Such reports help readers understand the underlying psychological shifts driving market behavior and the potential for continued price weakness.
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