Definition ∞ Demand Momentum refers to the strength and persistence of buying interest for a digital asset over a specified period. It is characterized by consistent purchasing activity that supports or drives price appreciation. Strong demand momentum indicates growing confidence and positive market sentiment. This force can sustain upward price movements.
Context ∞ Traders and analysts monitor demand momentum using various indicators, including trading volume, order book depth, and net buying pressure. A decline in demand momentum can signal a potential price reversal or consolidation phase. Understanding this dynamic is crucial for anticipating market shifts and assessing asset health.
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