Definition ∞ Widespread Panic Selling describes a market event characterized by a rapid and extensive divestment of assets due to extreme fear. This phenomenon occurs when a significant portion of investors simultaneously decide to sell their holdings, often triggered by adverse news, significant price drops, or general market uncertainty. Such selling is typically driven by emotional reactions rather than fundamental analysis, leading to accelerated price declines and increased market volatility. It frequently results in assets trading below their intrinsic value as liquidity dries up and order books thin.
Context ∞ Instances of Widespread Panic Selling are frequently highlighted in crypto news during sharp market corrections or periods of intense FUD (fear, uncertainty, and doubt). A key aspect for market observers involves identifying the triggers for such events and assessing their potential duration and impact on market structure. Understanding this behavior is crucial for discerning potential market bottoms and subsequent recovery phases.
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