Correction Bottoming Phase

Definition ∞ A correction bottoming phase in financial markets, including digital assets, describes the period following a significant price decline where the asset’s value stabilizes and selling pressure diminishes. This phase is characterized by reduced volatility, often accompanied by increased accumulation from long-term holders and a decrease in new lows. It signifies a potential reversal point where the market prepares for a recovery. This stage often precedes a new upward trend.
Context ∞ Crypto news frequently analyzes the correction bottoming phase to identify potential entry points for investors and signal a shift in market sentiment. Analysts examine on-chain metrics and trading volumes for indications of capitulation or renewed buying interest. Understanding this phase is crucial for market participants seeking to anticipate the end of a downturn.