Bitcoin The price chart looks very calm via the Bollinger Bands, a volatility gauge, hinting at a massive shift ahead.
BTC has been trading in a tight range between $85,000 and $90,000 for the past two weeks. As a result, the gap between its Bollinger bands, volatility bands placed two standard deviations above and below the 20-day simple moving average of the asset’s price, narrowed to less than $3,500, the lowest since July, according to data source TradingView.
This so-called tightening of the Bollinger bands indicates a period of low volatility during which the market is building energy for the next big move. History confirms that massive price swings often follow these squeezes.
For example, the last Bollinger band squeeze in late July capped a two-week period between $115,000 and $120,000. The squeeze set the stage for a three-month expansion, with prices swinging wildly from $100,000 to $126,000.
A similar trend occurred in late February: a range between $94,000 and $98,000 tightened within the Bollinger Band, followed by a decline to $80,000 by the end of the month.
Bollinger bands have accurately signaled bursts of volatility since at least 2018.
The latest squeeze therefore calls for vigilance among traders, as prices could soon move quickly in both directions. The latest squeeze therefore calls for vigilance among traders, as prices could soon move quickly in one direction or the other. At the time of writing, bitcoin was trading around $88,600, up just over 1% over 24 hours.
