Definition ∞ A Market Consolidation Signal indicates a period in financial markets where asset prices trade within a relatively narrow range, often following a significant price movement. This suggests a temporary equilibrium between buying and selling pressures, with participants awaiting new information or catalysts. Such periods can precede either a continuation of the prior trend or a reversal. It signifies a pause in directional price action.
Context ∞ In cryptocurrency markets, identifying market consolidation signals is important for traders and analysts seeking to anticipate future price direction. These periods often represent opportunities for accumulation or distribution by informed participants before a subsequent directional move. Technical analysts closely monitor these patterns for strategic decision-making.
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