Price Deviation

Definition ∞ Price deviation is the difference between a digital asset’s current market price and a reference point, such as its historical average, a specific moving average, or a theoretical fair value. This metric helps identify when an asset is trading significantly above or below its typical range. Large deviations can signal overbought or oversold conditions. It is a measure of price volatility relative to a norm.
Context ∞ Price deviation is a commonly used technical indicator in cryptocurrency market analysis to identify potential trading opportunities or risks. News reports often highlight assets exhibiting significant deviation from their mean as a precursor to price corrections or rallies. A key debate involves determining the appropriate reference points for accurate deviation assessment.