Investor conviction loss describes a decline in confidence among market participants regarding an asset’s future value. This sentiment shift often results in increased selling pressure, reduced buying interest, and a general withdrawal of capital from the asset or market. It can be triggered by negative news, regulatory uncertainty, security breaches, or prolonged price stagnation. A widespread loss of conviction can accelerate downward price spirals and hinder recovery efforts.
Context
News reports frequently analyze investor conviction loss to explain market downturns or prolonged periods of price weakness. Identifying the catalysts behind this loss is crucial for understanding market psychology and potential recovery timelines. This metric helps in assessing the underlying health of a digital asset market beyond simple price movements.
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