Price Bounce

Definition ∞ A price bounce describes a quick, temporary recovery in an asset’s market value after a decline. This short-term upward movement often occurs after an asset hits a significant support level, attracting opportunistic buyers. Unlike a sustained rebound, a bounce does not necessarily signal a reversal of the overall downward trend. Traders often view it as a brief corrective action within a larger market movement.
Context ∞ Financial analysts frequently observe price bounces in volatile digital asset markets, particularly for cryptocurrencies like Bitcoin and Ethereum. Discussions often center on whether a bounce represents a genuine market recovery or merely a dead cat bounce, indicating further declines. Future developments involve more sophisticated algorithmic trading strategies that aim to capitalize on these rapid price fluctuations, requiring increasingly precise market analysis.