Market Stress

Definition ∞ Market stress describes a condition in financial markets characterized by heightened volatility, reduced liquidity, and a general decline in asset prices. In the cryptocurrency sector, this typically manifests as rapid price drops, increased trading volume during downturns, and a general sense of investor apprehension. Such periods can be triggered by economic downturns, regulatory actions, or significant security incidents within the digital asset space.
Context ∞ Crypto news frequently reports on periods of market stress, analyzing the underlying causes and immediate effects on asset values. These events often test the resilience of various protocols and the stability of stablecoins. Discussions center on risk management strategies for investors and the potential for contagion across different digital asset classes during these turbulent times.