Panic selling

Panic selling occurs when investors hastily sell their stocks or assets out of fear of further losses, often triggered by negative news or market downturns. This widespread rush to sell can cause prices to drop sharply and rapidly, sometimes more than justified by the actual circumstances. The behavior is driven by emotion rather than analysis, which can exacerbate market declines and create a feedback loop of fear and selling. In essence, panic selling is an anxious, collective attempt to minimize losses, but it can unintentionally worsen the market situation.