This pain is most commonly Iliotibial band (ITB) friction syndrome, which amounts to excessive hyperextension or pressure of/on the IT Band.  Common causes are an inappropriate saddle position – either too high and/or to far back, leg length discrepancy (which causes the shorter leg to over-extend and stretch the IT Band), or improper cleat position that causes excessive internal rotation that increases pressure between the outside of the knee and the IT Band.

Good luck, and stay tuned for other common cycling and running related knee issues.

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