Market consolidation risk refers to the potential for a cryptocurrency market to experience a period of decreased trading activity and price stability following significant volatility. During consolidation, prices typically trade within a narrow range, indicating uncertainty among participants regarding future direction. This phase often precedes another substantial price movement.
Context
News reports often discuss market consolidation risk as a precursor to either a breakout or breakdown in asset prices. Recognizing this risk helps investors prepare for potential shifts in market dynamics, as prolonged consolidation can signal a build-up of pressure before a decisive move, offering important context for trading strategies.
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