Definition ∞ A technical correction describes a short-term price decline in an asset or market, typically between 10% and 20% from its recent peak, often occurring after a period of rapid price appreciation. This downward movement is generally viewed as a healthy market adjustment, allowing prices to consolidate before potentially resuming an upward trend. It is distinct from a bear market, which signifies a more prolonged and substantial decline. Such corrections are common in volatile digital asset markets.
Context ∞ Technical corrections are frequently reported in cryptocurrency news, often analyzed by traders and investors seeking to identify market entry or exit points. Discussions often revolve around technical analysis indicators that signal these corrections and their potential impact on broader market sentiment. Observing these price adjustments provides insight into market dynamics and investor psychology within the digital asset space.
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