Definition ∞ Panic selling is the rapid, widespread disposal of assets by investors driven by fear rather than rational analysis. This behavior typically occurs during sharp market downturns or in response to adverse news, leading to a cascade of sell orders that further depress prices. It is characterized by emotional decision-making, where investors prioritize exiting positions to avoid perceived greater losses. Such events can significantly amplify market volatility and create opportunities for long-term investors.
Context ∞ Crypto news frequently reports on instances of panic selling during sudden market crashes or major FUD (fear, uncertainty, and doubt) events. These reports often analyze the triggers, such as regulatory crackdowns or protocol failures, and their immediate impact on digital asset prices. Understanding panic selling helps interpret short-term market dynamics and the psychological factors influencing cryptocurrency valuations.
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