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  1. Home
  2. /Glossary
  3. /Dead Cat Bounce
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Dead Cat Bounce

A temporary recovery in price during a larger downtrend.

Definition

A temporary recovery in price during a larger downtrend. The name comes from the dark joke that even a dead cat will bounce if dropped from high enough. Traders who mistake it for a real reversal often get burned.

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Related Terms

Bear Market

A prolonged period where prices fall 20% or more from recent highs.

Rally

A sustained increase in prices after a period of decline or consolidation.

Accumulation Phase

A period when smart money quietly buys up an asset before a major price move.

Annualized Return

The average yearly return on an investment, calculated to account for compounding.

Arbitrage

Profiting from price differences of the same asset across different markets.

Ask Price

The lowest price a seller is willing to accept for an asset.

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