Definition ∞ A crypto bounce signifies a temporary price recovery of a cryptocurrency after a period of decline. This market event occurs when prices rebound from a recent low, often driven by short-term buying interest, technical factors, or positive news, but without necessarily indicating a sustained upward trend. Traders often watch for these movements as opportunities for short-term gains or as potential indicators of market stabilization. A bounce can be a precursor to a larger reversal or simply a temporary correction within a broader downtrend.
Context ∞ The analysis of crypto bounces is a constant focus for market participants seeking to identify entry and exit points in volatile digital asset markets. A key debate surrounds distinguishing a genuine trend reversal from a dead cat bounce, which is a brief recovery followed by further declines. Future developments in market analysis tools, particularly those incorporating artificial intelligence, may provide more precise identification and prediction of these short-term price movements.
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