Price dip absorption refers to the market phenomenon where a temporary decline in an asset’s price is met with significant buying activity, preventing a further downward spiral and often leading to a rapid price recovery. This indicates strong underlying demand and confidence from market participants who view the dip as a buying opportunity. It suggests a resilient market structure capable of withstanding selling pressure.
Context
Observing price dip absorption is a key indicator for market analysts assessing the health and sentiment surrounding a digital asset. This behavior often precedes upward price movements as accumulated buying power exerts influence. Future market models will likely incorporate more granular analysis of order book depth and on-chain liquidity to predict and quantify such absorption events.
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