Demand Exhaustion

Definition ∞ Demand exhaustion signifies a point in a market where the available buying interest has been largely satisfied, leading to a diminished capacity for further price appreciation. This condition often precedes a price reversal as sellers begin to dominate the market. Recognizing demand exhaustion is key to interpreting market movements and understanding shifts in asset valuation.
Context ∞ The current discussion regarding demand exhaustion in digital asset markets revolves around its potential as an indicator of trend changes amidst volatile price action. Analysts are scrutinizing on-chain data and trading volumes to identify nascent signs of this phenomenon. Future developments may involve more sophisticated algorithmic identification of exhaustion points, impacting trading strategies and market sentiment.