Dead Cat Bounce

A "dead cat bounce" refers to a temporary recovery in the price of a declining asset, such as a stock or cryptocurrency, before it continues to fall. The term suggests that even a dead cat will bounce if it falls from a great height. In investing, this phenomenon can mislead traders into thinking the asset has stabilized or is recovering when it's likely just a brief pause in a longer downward trend. Recognizing a dead cat bounce is important for making informed trading decisions and avoiding premature investments in a still-weak market.