Price Retracement

Definition ∞ Price retracement describes a temporary reversal in the direction of an asset’s price within a larger, established trend. It is a corrective movement against the prevailing market direction, not a full trend reversal. These pullbacks are often healthy market phenomena, allowing for profit-taking and the entry of new market participants. Technical analysts often use specific indicators to identify and measure these movements.
Context ∞ In cryptocurrency markets, price retracements are a frequent topic of discussion in market analysis and news due to the high volatility of digital assets. Traders closely monitor these pullbacks to identify potential buying opportunities within an uptrend or selling opportunities within a downtrend. Reports often explain how factors like profit-taking, minor regulatory news, or short-term market corrections contribute to these temporary price adjustments before the primary trend resumes.