Definition ∞ A low volatility zone describes a period or price range in the market where the price of a digital asset exhibits minimal fluctuation. During such times, trading activity may be reduced, and the asset’s price remains relatively stable within narrow boundaries. This can precede significant price movements, as accumulation or distribution occurs before a breakout or breakdown. It represents a phase of market equilibrium or indecision.
Context ∞ Crypto market analysts and news outlets frequently identify low volatility zones as important technical indicators. These periods often precede major price swings, making them points of keen interest for traders seeking to anticipate future market direction. Explanations for these zones often involve a balance between buying and selling pressure, or a waiting period for significant news or events.
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