Definition ∞ A Demand Exhaustion Signal indicates a point in the market where buying pressure for an asset significantly diminishes following a period of upward price movement. This signal suggests that the available capital from purchasers has been largely deployed, and fewer new buyers are entering the market at current price levels. It often precedes a price correction or a shift to a sideways trading range. This condition implies that the upward price momentum is losing its impetus.
Context ∞ Identifying a Demand Exhaustion Signal is crucial for interpreting market analyses in crypto news, particularly when assessing the sustainability of recent price rallies. Such signals can alert investors to potential short-term price pullbacks or the conclusion of an upward trend for a digital asset. News reports discussing decreasing trading volumes during price increases or specific technical indicators often reference this market dynamic.
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