Definition ∞ Investor Shakeout describes a market event where a significant number of less resilient or over-leveraged investors exit their positions, often at a loss. This occurs during periods of heightened market volatility, price corrections, or negative news cycles. The process typically removes weaker hands from the market, potentially setting the stage for a more stable recovery. It is a common occurrence in speculative markets, including digital assets.
Context ∞ The situation surrounding an Investor Shakeout is a recurring theme in cryptocurrency market cycles, often preceding periods of renewed upward momentum. A key discussion involves identifying the precise indicators that signal the completion of such a phase and the subsequent return of stronger market participants. A critical future development entails improved market analytics to differentiate between short-term corrections and sustained investor exodus. News frequently reports on market downturns leading to shakeouts, providing context for understanding broader sentiment shifts and asset revaluation.
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