Definition ∞ A supply absorption period denotes a phase in the market where available digital assets, particularly those recently sold or moved, are gradually acquired by buyers without causing significant price depreciation. During this time, the market effectively soaks up selling pressure, indicating a growing underlying demand. This period often follows a price correction or consolidation and can precede a sustained upward price movement. It reflects a rebalancing of market forces.
Context ∞ Supply absorption periods are closely watched by analysts in crypto news to identify potential accumulation phases and forthcoming market rallies. Discussions frequently involve on-chain metrics that track the movement of coins from sellers to new holders, signaling a shift in market control. Understanding this phase provides immediate, actionable context for discerning periods of underlying strength in a digital asset’s market structure.
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