Definition ∞ Fading demand momentum describes a decrease in the rate at which an asset is being purchased. This condition indicates that buying interest for a particular digital asset is weakening, even if prices are still rising or holding steady. It is characterized by declining trading volumes during price increases or a slower rate of price appreciation. This often suggests that the upward price movement may not be sustainable. Such a trend can precede a price consolidation or a reversal into a downward trend.
Context ∞ Crypto news frequently discusses fading demand momentum when analyzing market tops or periods of uncertainty. Technical analysts often identify this by observing divergences between price action and indicators like trading volume or relative strength. A common discussion centers on whether a particular asset’s price ascent is losing its underlying support from new buyers. This signal can prompt investors to reconsider their positions and anticipate potential market corrections.
Blockchain Knowledge
Cryptocurrency Foundation
Cryptospace Newsfeed
