Definition ∞ Consolidation, in financial markets, describes a period where an asset’s price trades within a narrow range, indicating a balance between buying and selling pressure. This phase typically follows a significant price movement and precedes a directional breakout. It represents a temporary pause in market activity as participants assess future price action.
Context ∞ Crypto news frequently discusses consolidation patterns as indicators of potential market trends, with analysts scrutinizing price charts for periods of sideways movement. The duration and breadth of these consolidation ranges are closely watched for signals of impending upward or downward price shifts. The broader market sentiment and macroeconomic factors often influence the length and resolution of these consolidation phases.
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