Declining Volatility

Definition ∞ Declining volatility describes a market condition where the magnitude of price fluctuations for a digital asset steadily diminishes over a period. This suggests a reduction in market uncertainty and a potential stabilization of the asset’s valuation. Lower volatility can indicate a shift towards a more mature market or a period of consolidation before a significant price movement.
Context ∞ News often cites declining volatility as a sign of market maturation or an impending breakout from a trading range. This condition can attract investors seeking less speculative opportunities or signal a pause in market activity as participants await new catalysts. Analyzing volatility trends helps gauge market confidence and predict future price behavior.