Correction
A correction is generally defined as a sudden and sharp increase in prices followed by a retracement or decline, and usually allows the market to return to a healthy equilibrium.
A correction, usually in financial markets, means that asset prices retreat or fall by a certain amount after a sustained sharp increase over a period of time. This pullback usually begins with the perception that current prices are overvalued and can be triggered by market participants taking profits in order to make a profit. Corrections usually ensure that the market returns to a healthy balance after rapid and excessive price increases. During this period, market participants generally look for longer-term investment opportunities based on more solid fundamentals and wait for asset prices to return to more sustainable levels.
