Definition ∞ A long term conviction drop refers to a decline in the sustained belief among long-term holders of a digital asset regarding its future value or utility. This sentiment shift is often evidenced by a decrease in holding periods or an increase in the movement of previously dormant assets. It suggests a weakening fundamental outlook for the asset.
Context ∞ This metric is closely monitored by market analysts using on-chain data to gauge the health of an asset’s investor base. News frequently reports on signs of a conviction drop, particularly after prolonged bear markets or significant negative developments. Such a decline can precede further price depreciation as long-term holders liquidate positions.
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