Definition ∞ “Weak hands flushed” is market jargon describing a scenario where inexperienced or highly emotional investors, often termed “weak hands,” sell their assets during a price decline. This mass selling typically occurs due to fear or impatience, leading to significant realized losses for these individuals. The process removes less confident holders from the market, often preceding a stabilization or recovery phase. It represents a cleansing of the investor base, leaving more resilient participants.
Context ∞ In cryptocurrency markets, the phrase “weak hands flushed” is commonly used in news analysis to indicate a potential market bottom or a significant turning point for digital assets. On-chain metrics are often employed to identify periods where a large volume of coins moves from short-term holders at a loss, suggesting capitulation. This event is viewed as a necessary precursor to a sustained price recovery, as the remaining holders are typically more resilient and committed to their positions.
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