An investor prone to panic selling at the first sign of a price decline.
“Weak hands” in crypto refers to traders that are prone to panic selling at the first sign of a price decline. These traders or investors have low confidence in the project or market and get emotional when they see the prices of the cryptocurrencies they invested in decline. The term carries a negative connotation since these traders are often inexperienced.
Weak hands trade with little conviction and based on emotions that prevent them from making good decisions. For that reason, weak hands are considered the type of investors that are the easiest to manipulate and shake out.
Weak hands often buy based on good news that only has a short-term impact, like a temporary spike in the price of a token. However, they also sell quickly when hearing bad news that causes token prices to dip. That is why more experienced traders with bigger budgets can consciously spread rumors about a token to cause the price to dip and weak hands to panic-sell their assets. This is called "shaking out" the weak hands.
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