Price Correction Absorption

Definition ∞ Price correction absorption refers to the market’s capacity to absorb selling pressure during a price decline without experiencing a prolonged or severe downturn. This phenomenon indicates robust underlying demand and strong investor conviction, where buyers step in to purchase assets at lower prices. It suggests that the market is resilient and can withstand temporary negative sentiment or profit-taking, preventing a deeper depreciation. Effective absorption helps stabilize asset values.
Context ∞ News articles frequently discuss price correction absorption when analyzing market resilience during periods of volatility in the cryptocurrency sector. This concept is often highlighted when major digital assets demonstrate stability despite significant selling events, indicating a healthy market structure. Understanding price correction absorption provides context for interpreting market reactions to adverse news or macroeconomic shifts, signaling underlying strength and investor confidence.