Definition ∞ A price consolidation zone is a period in financial markets where an asset’s price trades within a relatively narrow range, indicating a temporary balance between buying and selling pressure. During this phase, market participants often await new information or a catalyst to drive the next significant price movement. It represents a pause in a trend before a potential breakout or breakdown.
Context ∞ Traders and analysts often pay close attention to price consolidation zones, as they can precede significant volatility and offer strategic entry or exit points. The duration and volume characteristics within these zones are critical factors in determining the probable direction of the subsequent price action.
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