Market Floor

Definition ∞ A market floor represents a price level below which a digital asset is unlikely to fall due to strong buying support. This theoretical minimum price acts as a psychological or technical barrier, indicating a point where selling pressure is exhausted and significant purchasing activity resumes. The market floor is often established by historical trading patterns, production costs for miners, or the perceived fundamental value of the asset. Sustained price action above this level suggests underlying market stability.
Context ∞ Identifying a reliable market floor is a central concern for investors and analysts, particularly during bear markets or periods of high volatility. News reports frequently discuss whether certain price points can act as enduring support for assets like Bitcoin or Ethereum. Establishing a firm market floor is often seen as a prerequisite for a sustained price recovery.