A selling pressure signal indicates a heightened likelihood that cryptocurrency holders will liquidate their assets, potentially leading to price declines. This market indicator emerges from various on-chain or technical data points, such as increased inflows to exchanges, a rise in the number of profitable wallets sending coins, or bearish divergences in price momentum. These signals collectively suggest a growing desire among market participants to sell their holdings, which can absorb demand and push prices downward.
Context
News reports and market analyses frequently reference selling pressure signals to explain market corrections or anticipate future price drops for digital assets. Investors monitor these indicators closely to assess the immediate risk of downward price movements. Understanding these signals helps in making informed decisions about portfolio management in volatile cryptocurrency markets.
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