A sell-off is a concentrated wave of selling associated with a noticeable price decline. It can affect one token, a sector or many markets simultaneously. The term describes selling activity and its market effect; it does not require a fixed percentage drop, a particular duration or proof that everyone is panicking.
How selling moves prices
In an order-book market, sellers seeking immediate execution accept available bids. If that selling consumes nearby buy orders faster than new demand replaces them, subsequent trades may occur at lower prices. Thin liquidity can make the decline larger. Every completed sale still has a buyer; downward pressure concerns urgency and available prices, not unmatched completed transactions.
Profit-taking, adverse news, a need for cash or forced position closures can contribute. Several causes may interact, so a falling chart alone cannot identify the dominant one.
Distinguishing related terms
A correction describes a pullback from a peak, while a crash emphasizes a particularly sharp collapse. A sell-off can form part of either. It may subside, rebound or deepen, and the word alone cannot identify a bottom or establish that the asset has become undervalued.