Definition ∞ Loss selling exhaustion describes a market condition where the majority of investors who were inclined to sell their assets at a loss have already executed those sales. This typically occurs after a prolonged downturn, suggesting that the remaining holders possess a stronger conviction or are unwilling to sell at current prices. It can signal a potential bottoming out of the market or a significant reduction in downward price pressure. This state often precedes a market stabilization or recovery phase.
Context ∞ On-chain analysis frequently utilizes metrics like Realized Profit/Loss to identify periods of loss selling exhaustion in cryptocurrency markets. News commentary often references this concept when discussing market capitulation events or the search for a definitive market floor. Identifying this phase is significant for traders and analysts seeking signs of a potential market reversal.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
