Definition ∞ Market momentum fading indicates a decrease in the strength or speed of an asset’s price movement. This condition suggests that the buying or selling pressure driving a trend is diminishing, often evidenced by smaller price gains or losses over time, reduced trading volume, or a flattening of price charts. When momentum fades, it frequently precedes a period of consolidation or a reversal of the current price direction.
Context ∞ The current discussion surrounding market momentum fading in digital asset markets often considers the exhaustion of buying or selling interest after a prolonged trend. Traders closely monitor indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) to assess the underlying strength of price movements.
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