Definition ∞ A market downtrend is a sustained period where asset prices generally decrease across a market or specific sector. This condition is characterized by lower highs and lower lows in price charts, indicating a prevailing bearish sentiment and selling pressure. Downtrends can be influenced by macroeconomic shifts, regulatory changes, technological setbacks, or a general loss of investor confidence. Understanding these periods is essential for risk management and investment planning.
Context ∞ The key discussion surrounding a market downtrend involves identifying its catalysts and potential duration, alongside strategies for capital preservation. A critical future development entails observing how digital asset markets decouple or correlate with traditional financial markets during such periods. This provides immediate context for news regarding market corrections and economic analyses.
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