Definition ∞ Structural fatigue in financial markets refers to a condition where underlying market mechanisms or participant behaviors show signs of strain, inefficiency, or diminished resilience. This can manifest as reduced liquidity, increased price sensitivity to small orders, or a general lack of responsive participation from market makers. It suggests that the market’s capacity to absorb shocks or process large volumes without significant disruption is compromised. This state can precede periods of heightened volatility or instability.
Context ∞ The current discussion around structural fatigue often involves analyzing order book depth, trading volumes, and the health of market-making operations across various digital asset exchanges. A key debate exists concerning the extent to which current market structures can withstand significant external pressures or sustained selling events. Future developments will focus on strengthening market infrastructure and improving liquidity provision to mitigate the effects of such underlying weaknesses.
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