refers to the degree of certainty or belief investors hold regarding the future direction or valuation of a particular asset or the market as a whole. High market conviction suggests strong consensus among participants about a prevailing trend, leading to more decisive trading actions. Conversely, low conviction indicates uncertainty and potentially more volatile price action as participants await clearer signals. It is an indicator of collective investor sentiment.
Context
Discussions about market conviction often arise when analyzing periods of sustained price appreciation or sharp reversals. Observers assess indicators such as trading volumes, options market activity, and on-chain data to gauge the strength of underlying support or resistance for digital assets. A prevailing lack of market conviction can lead to sideways price action or increased susceptibility to short-term news events.
Investors are holding Bitcoin and Ethereum, evidenced by low outflows, while increasing stablecoin deposits signal readiness for potential market shifts.
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