Reversal potential describes the likelihood of an asset’s price trend changing direction. Technical analysts assess reversal potential by observing specific chart patterns, indicator divergences, and volume shifts. It suggests that a prevailing upward or downward price movement might soon conclude and reverse course. Identifying this potential is crucial for traders seeking to enter or exit positions strategically.
Context
In cryptocurrency markets, discussions about reversal potential are common during periods of extended price trends, whether upward or downward. News articles often highlight technical indicators or on-chain metrics that suggest a possible shift in market momentum. Traders frequently scrutinize these signals to anticipate changes in digital asset valuations.
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