Structural Bottom Formation describes the process where a market establishes a durable low point after a prolonged downturn, characterized by a series of price movements that indicate a shift in underlying market dynamics. This formation often involves a period of accumulation, reduced selling pressure, and increasing buyer interest. It signifies a transition from a bearish trend to a more stable or potentially bullish phase. This process suggests a foundational shift in market sentiment.
Context
News reports frequently identify structural bottom formation as a critical indicator for long-term investors seeking to enter the market after a bear cycle. On-chain metrics, such as a decline in long-term holder selling and an increase in accumulation addresses, often support this thesis. Recognizing this formation helps market participants understand the cyclical nature of digital asset markets and anticipate major trend reversals. It provides a strategic framework for assessing market recovery potential.
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