Definition ∞ Post-crash selling refers to the wave of liquidations and divestments that occurs in a market following a significant and sudden price decline. This selling activity is often driven by panic, margin calls, or a loss of confidence among investors. It can prolong a market downturn as participants exit positions to mitigate further losses. This phenomenon typically exacerbates market volatility after an initial sharp drop.
Context ∞ In cryptocurrency markets, post-crash selling is a common topic in news reports after major market corrections, such as those caused by macroeconomic events or protocol failures. Analysts monitor on-chain metrics for signs of capitulation, where long-term holders might sell at a loss, indicating the potential end of this selling phase. Understanding post-crash selling is crucial for assessing market recovery potential and investor resilience.
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