Spot demand exhaustion describes a market condition where the buying pressure for a digital asset in the spot market significantly diminishes, indicating that most interested buyers have already acquired the asset. This often leads to a slowdown in price appreciation or a reversal, as the absence of new demand allows sellers to gain control. It is a key indicator for market analysts to identify potential tops or consolidation phases. This condition suggests a temporary or sustained lack of fresh capital entering the asset.
Context
Spot demand exhaustion is frequently discussed in crypto news during bull market pauses or before price corrections, serving as a signal for traders and investors. Analysts examine on-chain metrics and exchange order books to identify this condition. Future developments involve more sophisticated analytical models that combine spot demand indicators with derivatives market data to provide a comprehensive view of market strength and potential turning points.
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