Bitcoin’s Record Bollinger Band Squeeze Signals Looming Volatility
Bitcoin's record-tight Bollinger Band squeeze means that volatility is about to rise, which might lead to a huge breakout.
Quick overview
- Bitcoin's Bollinger Bands are at their tightest point in history, indicating that volatility is likely to increase soon.
- Analysts believe that this compression often precedes significant price movements and breakout events.
- While some experts predict a major volatility surge, others argue that the current market evolution suggests a more subdued future.
- Historically, October has been a favorable month for Bitcoin, but opinions on future price movements remain divided.
Bitcoin‘s record-tight Bollinger Band squeeze means that volatility is about to rise, which might lead to a huge breakout.
Bitcoin’s weekly Bollinger Bands were at their tightest point in cryptocurrency history, which could mean big price changes are coming. The technical indicator usually comes before big changes in volatility and breakout events in the financial markets.
“Mr. Anderson,” a well-known crypto analyst, talked about the historic Bitcoin (BTC) compression levels on Tuesday. He said that when volatility compresses this much, expansion is sure to follow. When prices start to rise, they usually quickly test the outer bands, which gives traders a lot of chances to make money.
“When volatility gets this tight, it always expands,” they added. “Once expansion starts, price almost always tests the outer bands very quickly.”
Nassar Achkar, the CoinW exchange’s chief strategy officer, told Cointelegraph that the Bollinger Bands’ tight compression “signals the calm before a significant volatility storm.”
Hunters of Web3 founder “Langerius” said that this kind of excessive compression almost never ends gently. Historical patterns show similar tight compressions preceded major price movements, including July’s surge from $108,000 to new all-time highs over $122,000 within days.
“CryptoVizArt,” a researcher at Glassnode, disagreed with the bullish views, saying that overall volatility has gone down as BTC has matured. The expert said that this is just normal market evolution and not a sign of what would happen in the future. He also said that compression findings don’t have any genuine predicting significance.
Traders call October “Uptober” since it has historically been a good month for Bitcoin. Data reveals that 10 of the last 12 Octobers and 8 of the last 12 fourth quarters have seen advances, but analysts still disagree on what will happen next.
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