“Weak hands” is a term often used in both the forex and cryptocurrency markets with a negative connotation to describe the behavior of inexperienced traders and investors who lack conviction in their trading strategies or lack the resources to carry them out.
Understanding the Term
In the crypto space, an investor who chooses to sell their investments and take a loss when there is a substantial dip in the market is said to have ‘weak hands’. Commonly, they are led to such decisions by anxieties that stem from any negative news about the asset.
Weak hands tend to be easily unnerved by price fluctuations, and they often tend to buy at the peak and sell at the trough. However, they also provide liquidity to these markets.