Definition ∞ Demand exhaustion confirmed signifies a market condition where buying interest has significantly diminished following an upward price movement. This indicates that the asset has reached a point where buyers are no longer willing or able to push prices higher. Volume patterns often show a decrease during this phase, confirming the weakening of upward momentum.
Context ∞ In crypto markets, demand exhaustion often precedes a price correction or a reversal in trend. Traders utilize various technical indicators and on-chain metrics, such as declining active addresses or transaction counts at higher prices, to identify this signal. Recognizing demand exhaustion is essential for anticipating potential market shifts and adjusting trading strategies accordingly.
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