Definition ∞ Selling Momentum describes the market force indicating a strong and sustained downward pressure on the price of an asset, driven by a prevalent inclination among holders to sell. This phenomenon typically occurs when negative news, weakening fundamentals, or broad market downturns cause investors to liquidate their positions rapidly. It reflects a collective market psychology favoring asset divestment. This force can accelerate price declines.
Context ∞ In cryptocurrency markets, selling momentum can be exacerbated by the rapid, global nature of trading and the influence of social media sentiment. Analysts often track indicators such as increased trading volume during price drops, rising on-chain transfers to exchanges, and negative funding rates in derivatives markets to assess this momentum. Understanding selling momentum is crucial for interpreting market movements and anticipating further price depreciation. News about regulatory actions or major protocol exploits can significantly amplify this effect.
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