A correction is a meaningful decline from a recent price peak. Market commentary often uses the term for a pullback after an advance, when part of the previous gain is reversed. Despite the name, it does not prove that the earlier price was wrong or that the new price is fair.
A convention, not a crypto rule
In traditional markets, a decline of roughly 10% to less than 20% from a recent high is commonly called a correction. Crypto discussions use the word more loosely because assets differ widely in volatility. The asset, peak date and observation period should be clear when quoting a percentage.
A token falling from USD 100 to USD 88 has declined 12%. That calculation describes the move without determining its cause or how much farther it may fall.
Where it fits in a trend
Corrections can occur during bull markets, but a decline first described as a correction can deepen into a bear market. Profit-taking, changing expectations or broader selling may contribute, and several causes can overlap.
The label does not specify the duration or confirm a recovery. An assessment of market structure, demand and trading liquidity is still needed to understand the conditions behind the move.