Bitcoin The price chart looks extremely calm with Bollinger Bands, a volatility gauge, indicating a massive swing.
BTC has traded in a tight range between $85,000 and $90,000 for the past two weeks. As a result, its Bollinger bands, the difference between volatility bands, have placed two standard deviations above and below the asset price’s 20-day simple moving average, which has fallen below $3,500, the lowest since July, according to data source TradingView.
This so-called Bollinger Band squeeze indicates a period of low volatility in which the market is building energy for the next big move. History confirms that large price swings often follow these squeezes.
For example, the last Bollinger Band squeeze was in late July, grinding out the two-week sideways between $115,000 and $120,000. The squeeze paved the way for a three-month extension, with prices ranging from $100,000 to $126,000.
A similar pattern emerged in late February: in Bollinger Band squeezes, a range tightened between 000 94,000 and 000 98,000, followed by a slide to 000 80,000 at the end of the month.
Bollinger Bands have accurately signaled volatility breakouts since at least 2018.
The latest squeeze, therefore, calls for trader vigilance as prices may soon move sharply in either direction. The latest squeeze, therefore, calls for trader vigilance, as prices may soon move sharply in either direction. At the time of writing, Bitcoin traded around $88,600, up just over 1% on a 24-hour basis.