Price Foundation

Definition ∞ Price Foundation refers to the underlying support level for a digital asset’s market value, often established by strong buying interest from long-term holders or significant accumulation by institutional investors. This level suggests a point below which the asset’s price is unlikely to fall substantially due to consistent demand. It is often reinforced by fundamental factors such as network utility, developer activity, and increasing adoption. A robust price foundation indicates sustained market confidence.
Context ∞ News reports frequently discuss the establishment or testing of a price foundation during market corrections or consolidation phases. Identifying these levels helps analysts determine potential reversal points or areas of strong demand. The strength of an asset’s price foundation can be a key indicator of its long-term viability and resilience against bearish market pressures.