Definition ∞ A risk signal is an indicator or piece of information that suggests an increased likelihood of adverse events, potential losses, or future instability. These signals can stem from market data, on-chain metrics, regulatory announcements, or macroeconomic trends. Identifying and interpreting risk signals is a core component of effective risk management strategies. They prompt vigilance and potential adjustments in investment or operational approaches.
Context ∞ In the digital asset space, risk signals are constantly monitored to anticipate market corrections, security vulnerabilities, or regulatory challenges. News reports often highlight specific risk signals, such as abnormal transaction volumes, significant outflows from exchanges, or impending regulatory decisions that could impact asset values. Proactive recognition of these signals assists investors and projects in mitigating potential negative impacts.