Definition ∞ Trading volatility refers to the degree of price fluctuation an asset experiences over a specific period. High volatility indicates large and rapid price changes, while low volatility suggests more stable price movements. It is a key measure of risk in financial markets. This metric quantifies price unpredictability.
Context ∞ Cryptocurrency markets are renowned for their high trading volatility, which presents both opportunities and risks for market participants. News reports frequently highlight significant price swings and discuss their underlying causes, such as market sentiment, regulatory developments, or macroeconomic events. Managing exposure to this volatility is a primary concern for digital asset traders. This characteristic defines much of the crypto trading experience.
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