Definition ∞ A short-term correction is a temporary price decline in a cryptocurrency market following a period of upward movement. This market phenomenon represents a brief reversal of an ongoing trend, typically lasting from a few days to several weeks, and often involving a price decrease of 10% to 20% from a recent peak. Corrections are considered healthy market behavior, allowing for profit-taking, rebalancing, and the absorption of new demand before the primary trend potentially resumes. They differ from sustained bear markets in their duration and magnitude.
Context ∞ News reports often discuss short-term corrections as a normal aspect of cryptocurrency market cycles, providing context for price volatility. Analysts frequently identify key support levels where a correction might find its floor, influencing trading strategies. Understanding these corrections helps investors manage expectations and avoid panic selling during temporary downturns.
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