Definition ∞ A price plunge describes a sudden and significant decrease in the market value of an asset. This rapid decline can be triggered by various factors, including negative news, major sell-offs, regulatory actions, or broader market downturns. Price plunges often lead to investor panic and increased market volatility. They represent sharp corrections or reactions to adverse events.
Context ∞ Crypto news frequently reports on price plunges in digital asset markets, which are known for their high volatility. These events can result from macroeconomic pressures, protocol vulnerabilities, or large liquidation cascades. Discussions often center on the causes and potential recovery paths following such sharp declines. Understanding the factors contributing to price plunges is crucial for risk management and market analysis in the digital asset space.
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