Short-Term Bounce

Definition ∞ A Short-Term Bounce describes a temporary and often rapid upward price movement of an asset following a period of decline. This price recovery is typically brief and may not signal a sustained reversal of the broader downtrend. Traders often seek to capitalize on these transient increases, but they carry inherent risks due to their speculative nature. It is often a reaction to oversold conditions or minor positive news.
Context ∞ In crypto news, analysts frequently discuss short-term bounces when market prices experience temporary recoveries after significant drops, particularly during bear markets. These events are closely watched by traders for potential profit opportunities but are also cautioned against as they can be misleading indicators of a true market recovery. Understanding the characteristics of a short-term bounce helps investors distinguish between fleeting price movements and more enduring market shifts in digital asset valuations.