Definition ∞ A sentiment reset describes a significant shift in the prevailing market mood or investor outlook, often occurring after a period of extreme optimism or pessimism. This typically involves a recalibration of expectations regarding asset prices or market direction. It signifies a fundamental change in how participants perceive the market. This adjustment can lead to new trends.
Context ∞ In cryptocurrency markets, a sentiment reset can follow major news events, significant regulatory changes, or substantial price movements, leading to a re-evaluation of market prospects. Analysts frequently discuss sentiment resets as indicators of a potential change in market direction. News reports often frame these shifts as pivotal moments for investor strategy.
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