Definition ∞ Market risk increase indicates a heightened probability of adverse price movements or greater uncertainty within the digital asset market. This condition suggests that factors such as economic instability, regulatory changes, or decreased liquidity are making investments more susceptible to losses. It signals a period where potential returns are accompanied by a greater chance of capital depreciation. Investors typically respond by reducing exposure or seeking safer assets.
Context ∞ When cryptocurrency news reports a market risk increase, it often highlights factors contributing to potential price volatility and investor caution. This might include concerns over global economic conditions, regulatory crackdowns, or declining on-chain activity. Understanding this concept provides essential context for evaluating the current investment landscape and for anticipating potential downward pressure on digital asset prices.
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