What Is a “Dead Cat Bounce” in Technical Analysis?
A "dead cat bounce" is a temporary, brief recovery in the price of a severely declining asset, such as a cryptocurrency or stock. It is a misleading rally that fails to reverse the long-term downtrend.
Traders often mistake it for a true market reversal. The term suggests that even a dead cat will bounce if dropped from a great height.
It is typically followed by a continuation of the bear market.
Glossar
Technical Indicators
Derivation ⎊ Technical indicators, within cryptocurrency, options, and derivatives, represent quantifiable assessments of historical price and volume data intended to forecast potential directional movements or identify market conditions.
CAT
Framework ⎊ Within cryptocurrency derivatives and options trading, CAT frequently denotes a customized algorithmic trading framework, often deployed for sophisticated risk management and dynamic hedging strategies.
Technical
Analysis ⎊ Within cryptocurrency derivatives and options trading, technical analysis transcends mere chart pattern recognition; it represents a structured, data-driven approach to forecasting price movements predicated on historical market data and volume.