Price Bands

Definition ∞ Price bands are defined ranges or channels within which the price of a digital asset is expected to trade, based on technical analysis or market structure. These bands are often established by indicators such as moving averages, Bollinger Bands, or identified support and resistance levels. They help traders anticipate potential price movements and identify areas of consolidation or breakout.
Context ∞ Price bands are a standard analytical tool frequently discussed in cryptocurrency market analysis and news to forecast asset movements. Traders use these ranges to identify potential entry and exit points, as well as to gauge market volatility. Observing how an asset’s price interacts with these bands provides context for understanding short-term and medium-term market trends.