Definition ∞ This describes a behavioral tendency where individuals prefer to avoid potential losses over equivalent potential gains. It means that the psychological impact of losing a certain amount of money is greater than the positive impact of gaining the same amount. This influences decision-making, particularly in uncertain environments.
Context ∞ Risk aversion in the cryptocurrency market is frequently discussed in relation to investor sentiment during periods of high volatility or uncertainty. Analysts are observing shifts in risk appetite as indicators of potential market tops or bottoms. Debates often surround whether the perceived risks of digital assets deter institutional capital or if a growing understanding of the technology is mitigating this aversion.
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