#MarketCorrectionBuyOrHODL
What does a market correction mean in crypto?
The term market correction refers to a temporary bounce in price during a large and rapid rise in the market. Therefore, a market correction is a sharp, short-term decline in price that comes as a reaction to overbuying or overvaluation in the market. Therefore, a bounce from a high price is considered a completely healthy phenomenon; it enables the market to absorb the rise and then launch to new heights.
Generally, when the market drops by 10% or more after a huge price rise, this drop is considered a market correction. However, 10% is not a fixed rule; the market can witness a correction of 3% and another of 20%.
Corrections often occur during periods of economic expansion, when investors become overconfident and push the asset to unrealistic prices. Then, corrections come to restore the market to its reality.