The difference between market pullback and market correction lies in the duration and intensity of the price decline:
1. Market Pullback
What is it? A temporary drop in prices within an overall uptrend.
Cause: Often triggered by profit-taking or short-term news.
Duration: Usually short (days or weeks).
Recovery: The market typically resumes its upward trend quickly.
Example: An asset rises 30% but drops 5%–10% before climbing higher again.
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2. Market Correction
What is it? A more significant and prolonged decline, often around 10% or more, to adjust prices to fairer levels.
Cause: Overvaluation, economic uncertainty, or structural market changes.
Duration: Can last weeks or months.
Recovery: May not always return to the previous trend, potentially signaling a cycle shift.
Example: The market grows excessively and then corrects to more sustainable levels.
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Simple Summary: