Are you context switching?
If velocity fluctuates often below the lower margin, this is often an indication of team members not being truly dedicated to a product team. It is good to have a measure that can act as a company mirror to reflect the inability to innovate.
It is also a sign of context switching, which pays a great toll on productivity.
Of course, illnesses and days off, especially during holiday seasons impact the velocity to a great degree and this should not trigger any warnings. These events can be noted on the chart to rule out any false reports.
Margins will be configurable per team and organization level.
Reveal possible recurring bad practices of reallocating people in and out of teams. Maybe one team member is occasionally borrowed to another team, or maybe production incidents are preventing team members from finishing or even starting the Sprint PBIs.