What is meant by a correction in the cryptocurrency market?
A correction is a temporary price decline that occurs after a strong rise, and it is considered a natural and healthy phenomenon in financial markets, not necessarily indicating a reversal of the overall trend.
When is the market considered to be in a correction?
🔹 Drop percentage: Usually ranges from 10% to 30% from the last peak.
🔹 Absence of major negative news: The decline is natural without panic or impactful news.
🔹 Decreased trading volume: Compared to the previous rising period.
🔹 Technical indicators: Such as the Relative Strength Index (RSI) start to decline from overbought levels (above 70).
🔹 The overall trend is upward: But a temporary decline occurs within this trend.
Note:
A correction is a good opportunity to enter and buy at a lower price, but it requires a deep understanding of the market and not rushing to make a decision.
