Definition
Range trading is a trading concept based on the idea that an asset’s price can oscillate between two main levels for a period of time. These levels are commonly described as support, where price tends to stop falling, and resistance, where price tends to stop rising. Within this sideways movement, traders focus on the repeated swings between these boundaries rather than on a strong upward or downward trend. The concept can be applied to crypto markets on both centralized exchanges and other venues where prices are clearly quoted.
In this framework, the price “range” is the band between support and resistance that contains most price action over the chosen timeframe. Range trading assumes that, until the market clearly breaks out of this band, price is more likely to stay inside it and continue bouncing between the two levels. The concept is sensitive to trading conditions such as liquidity and slippage, which can affect how closely actual trade prices match the visible range. It is mainly used as a way to describe and interpret non-trending market behavior rather than a guarantee of future price movements.
Context and Usage
Range trading is often discussed alongside support and resistance because these levels define the upper and lower boundaries of the range. In crypto markets, it is frequently observed on pairs that spend time consolidating after strong moves, especially on liquid markets listed on a CEX. The concept helps traders categorize market conditions as “ranging” instead of “trending,” which can influence the types of strategies they consider appropriate.
Because actual execution prices can differ from quoted prices, slippage can affect how precisely trades align with the identified range. A tight range with low volatility may be more sensitive to even small amounts of slippage, while a wider range may be more forgiving. Overall, range trading serves as a descriptive framework for understanding price behavior when markets lack a clear directional trend and instead move back and forth within a relatively stable band.