Range-bound market
What does it mean when a market keeps bouncing between the same price levels instead of trending?
In plain words
A range-bound market trades between an upper and a lower level, often returning to each repeatedly without sustaining a rise or fall. Traders mark the top as resistance and the bottom as support.
Why it matters
In a range, the direction of individual moves tells you little about the next one; the levels themselves carry the information. Trend-following strategies can whipsaw, losing on each reversal, while range-based approaches depend on those levels continuing to hold.
In a real week: BTC, week of 17 February 2025
In the week of 17 February 2025, BTC opened at 96118.12 and closed at 96258.0, a change of 0.15%, after trading between a low of 93388.09 on Tuesday 18 February and a high of 99475.0 on Friday 21 February, a 6.52% range. The close sat at 47.1% of that range, in the middle third.
A common mistake
Reading a flat weekly return as an unchanged market. Prices can travel a wide range and end where they started, leaving the levels well defined even though the net change looks like nothing happened.