Definition ∞ Market cycle health refers to the overall vitality and sustainability of a financial market’s progression through its various phases, including accumulation, expansion, distribution, and contraction. In the context of digital assets, it involves analyzing indicators such as trading volume, price volatility, investor sentiment, and network activity to assess the underlying strength and future trajectory of the crypto market. A healthy market cycle suggests balanced growth and correction, rather than speculative bubbles or prolonged stagnation. It provides a framework for understanding broader economic trends.
Context ∞ Discussions about market cycle health are prominent in cryptocurrency news and analyses, particularly during periods of significant price fluctuations or regulatory developments. Analysts often assess on-chain metrics and macroeconomic factors to determine whether the market is in a sustainable growth phase or approaching a period of correction. Understanding market cycle health helps investors and participants make informed decisions regarding digital asset allocation and risk management.
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