Bitcoin's Volatility Bands Signal Imminent Major Price Move
Bitcoin has been trading in a narrow range between $85,000 and $90,000 for approximately two weeks. During this period, its volatility bands, measured by Bollinger Bands, have tightened to a gap of less than $3,500, the narrowest since July. This compression signals a potential significant price movement ahead.
Historical patterns indicate that such squeezes often precede major volatility. For instance, a similar squeeze in late July led to a two-week range between $115,000 and $120,000 before expanding to a broader range of $100,000 to $126,000. Another squeeze in late February tightened between $94,000 and $98,000 before the price dropped to $80,000 by month-end.
Currently, Bitcoin trades around $88,600, reflecting a roughly 1% increase over the past 24 hours. The reliability of Bollinger Bands in predicting volatility spikes has been observed since at least 2018. The present squeeze indicates a low-volatility phase where energy is building for the next significant price swing, which could result in rapid movements either upwards or downwards.
