Definition ∞ Buyer exhaustion describes a market condition where purchasing power diminishes after a sustained price advance. This indicates that the majority of participants willing to acquire an asset at higher valuations have already done so, leading to a reduction in demand. The decreasing volume on upward price movements, coupled with an inability to sustain new highs, often signals this state. It typically precedes a price consolidation or a downward trend.
Context ∞ Buyer exhaustion is a significant technical analysis indicator, frequently discussed in crypto news to forecast potential market reversals. Analysts observe trading volume and price action to identify this pattern, often signaling a shift in market sentiment. A critical future development involves more accurate predictive models that account for unique digital asset market structures, improving early detection of such shifts.
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