Glossary Term

Bearish Sentiment

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Markets, at least in short to medium term, are primarily driven by sentiment. When all is said and done, for any asset to change in price a buyer and a seller have to make an exchange. When more people are selling than buying, the price necessarily drops. Technical analysts point to this dynamic as being the fundamental reason why sentiment governs price change. Bearish sentiment is simply negative emotion and opinion. It is characterised by widespread pessimism surrounding the prospects of a security, market or even broader economy. When this occurs, the holders of the assets in question sell to secure the current price because they are expecting the value of the assets they hold to drop in the future.

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