Definition ∞ Selling at a Loss describes the act of divesting an asset for a price lower than its original purchase price. This action results in a negative financial return for the seller. In digital asset markets, participants may sell at a loss due to urgent liquidity needs, a loss of confidence in the asset’s future prospects, or to mitigate further potential depreciation. This behavior often contributes to downward price momentum.
Context ∞ Crypto news frequently discusses instances of Selling at a Loss, especially during bear markets or after significant price corrections. Onchain analysis often identifies cohorts of investors, such as short-term holders, who are actively selling at a loss, providing insight into market sentiment and capitulation events. The prevalence of selling at a loss can indicate a period of market distress or a cleansing phase before a potential recovery.
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