In the cryptocurrency world, sideways trading refers to a period in which the price of a cryptocurrency or digital asset does not follow a defined upward (bullish) or downward (bearish) trend. During this period, the price moves within a relatively narrow range, with small upward or downward movements. This behavior is also known as sideways movement or consolidation.
Laterality characteristics:
1. Stable price range: The asset oscillates between a support (minimum price) and resistance (maximum price) level, without consistently breaking either.
2. Reduced volume: Trading volume often tends to decrease, indicating less market interest.
3. Market indecision: Represents a phase in which buyers and sellers are in balance, without enough strength to start a new trend.
Impacts and strategies during laterality:
Risk for traders: For day traders, sideways trading can make it difficult to make profits, as the movements are small.
Opportunity for swing traders: Some use this phase to profit by buying at support and selling at resistance.
Preparation for a breakout: Generally, lateral movement precedes a stronger move, up or down, known as a breakout or breakdown.
This phenomenon is common in cryptocurrency markets, due to the high volatility and speculative nature of the sector.
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