Topic: What is a "correction"? (Read 192 times)
Over valuation of something results into a rapid fall of price once people realise that it is overvalued. In case of Bitcoin, correction is often followed by a dump as people panic sell when bitcoin price is correcting itself, making its price fall more.
a correction is when a commodity or anything that is being traded rises in value as a result of over valuaion or some other factor which could not provide any foundation for its real value. in these instances the correction would stop the price increase and would then go back down to the correct or assumed to be real price of the commodity
Correction doesn't mean dumping, it means that the current value has risen/fallen too much above/below the "expected" levels and when it carries it's journey back to where everyone wants it at, and reaches that part of the value when gains back after falling too much or falls a bit after gaining hard, that's what we call correction.
But how does that happen, exactly? Especially the last part "when the value falls a bit after gaining hard", isn't that due to people cashing out? Perhaps dumping was too strong an expression, but what other than people selling would drive the price down in such a scenario?
Quote
correction
/kəˈrɛkʃ(ə)n/
noun
the action or process of correcting something.
/kəˈrɛkʃ(ə)n/
noun
the action or process of correcting something.
the meaning is clear enough!
the market is filled with traders, and traders want profit. they buy in order to sell. when price goes up, they sell and selling means price will come down. this downward movement (dip, drop,...) is called correction.
the demand in total is what keeps the price up and increases it over time. the traders who buy and sell are only some part of the market. for bitcoin they are bigger part and since the market itself is smaller, the corrections become big from time to time.
Correction doesn't mean dumping, it means that the current value has risen/fallen too much above/below the "expected" levels and when it carries it's journey back to where everyone wants it at, and reaches that part of the value when gains back after falling too much or falls a bit after gaining hard, that's what we call correction.
So I hear this word in every other bitcoin related discussion, but nobody can tell me what it exactly is. Is it a fancy word for dip? When you say correction, you mean people dumping their coins suddenly due to the price increase, right? Or are we talking about a completely separate mechanism here?
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