BTC price trading range narrows to tightest in months

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The crypto market has gotten boring, with bitcoin (BTC), the world’s largest digital asset by market value, settling in the narrowest price range in months despite ongoing concerns over banking stability US regional markets and the country’s debt ceiling.

The range, or the difference between the high and the low reached in the seven days leading up to May 21, was 3.4%. It’s one of the narrowest in the last three years and comparable to lackluster trading seen earlier this year, for a brief time last month and in July 2020, according to data tracked by analytics firm Glassnode.

“It’s comparable to January 2023 and July 2020, both of which preceded large market moves. This suggests high volatility is likely on the horizon,” Glassnode tweeted Monday morning.

Recently, option-based volatility metrics for bitcoin and ether (ETH) also hit all-time highs.

Narrow trading ranges indicate that neither the bullish nor bearish outlook is dominating the price action. This usually happens when markets are faced with competing influences and narratives. While ongoing problems in the US banking sector favor the rise of perceived safe-haven assets like bitcoin, the unresolved impasse in debt ceiling negotiations and the rally in the dollar index suggest otherwise.

Eventually, some influences fade into the background, leading to a sharp widening of the trading range or a strong movement in either direction. Traders typically implement price independent strategies, such as straddle and choke, when anticipating an exit from tighter trading ranges.

Bitcoin was trading near $26,830 at press time, according to data from CoinDesk.

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