Speculative Excesses describe periods of intense, often irrational, buying activity in a market, driving asset prices significantly above their fundamental value. These conditions are characterized by rapid price appreciation, high trading volumes, and a strong fear of missing out among investors. Such periods often precede sharp market corrections.
Context
Speculative excesses are frequently highlighted in crypto news during bull markets or periods of rapid price increases for digital assets. Analysts and commentators often discuss whether current market conditions represent unsustainable speculation, warning of potential bubbles. Understanding these excesses helps in assessing market health and identifying periods of elevated risk for digital asset investors.
The cryptocurrency market has seen funding rates drop to levels not seen since the 2022 bear market, indicating a significant flush of speculative leverage.
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