Definition ∞ A market top indicator is a specific analytical tool or metric that suggests a digital asset or the broader market is approaching or has reached its peak price within a particular cycle. These indicators often combine technical analysis, on-chain data, or behavioral patterns to identify conditions historically associated with market tops. They aim to provide signals before a significant price reversal occurs. Such tools assist in recognizing potential inflection points.
Context ∞ Cryptocurrency news often features discussions about various market top indicators as analysts attempt to forecast major market reversals. Reports frequently highlight specific metrics, such as extreme investor euphoria or distribution from long-term holders, as signs of an impending peak. Understanding these indicators is vital for anticipating significant shifts in market direction.
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