With price action confined to a well-defined range over the past six months, volatility is tightening, resembling a coiling spring. After an extended period without significant macro movements, expectations for increased volatility are rising.
We can assess market volatility compression by measuring the percent range between the highest and lowest price ticks over the last 180 days. Currently, only August 2023 and May 2016 show a tighter 180-day price range, underscoring the relative tightness of the current market structure.
