Market momentum loss indicates a deceleration in the upward or downward price movement of a digital asset, suggesting a weakening of the prevailing market trend. This phenomenon often precedes a price consolidation, reversal, or a period of reduced volatility. It signals that buying or selling pressure is diminishing. Traders monitor this for potential shifts in market direction.
Context
In digital asset trading, market momentum loss is a crucial signal for technical analysts attempting to identify exhaustion in price trends. It can be observed through various indicators, such as declining trading volume during a rally or decreasing magnitude of price swings. A key discussion involves distinguishing genuine momentum loss from temporary pauses in a strong trend. Future analytical tools aim to provide earlier and more precise identification of these critical turning points.
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