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A lot has been stated in current weeks relating to how uncharacteristically calm Bitcoin has been. On weekly timeframes, volatility measures are at their lowest ever.
Sadly, regardless of the record-setting lull, directionless sideways worth motion may proceed for lots longer.
Document-Breaking Low Volatility State May Proceed Longer
Bitcoin worth is at a standstill in comparison with its normally explosive self. It’s remained locked in a decent buying and selling vary, to the purpose the place even a $300 transfer to both facet would possibly really feel like a serious breakout.
Few factors all through historical past on decrease timeframes have ever been this quiet. That is in accordance with the weekly Bollinger Bands and Bollinger Band Width readings.
Excessive tightening within the Bollinger Bands suggests what’s a known as a Squeeze setup — a scenario the place following a low volatility section of narrowing, the bands then increase and launch a wave of volatility. It might be quite a bit longer till that occurs, nevertheless.
The month-to-month bands would possibly want additional tightening | BTCUSD on TradingView.com
Analyzing Month-to-month Bollinger Band Width
Whereas the weekly is at report tightness, utilizing the exact same device on the month-to-month timeframe, reveals that that there might be quite a bit additional to go.
The Bollinger Band Width isn’t as little as it has been previous to previous bull runs — notably to the lows of early 2016 and late 2020. This might recommend the opportunity of months extra sideways earlier than a significant breakout to new all-time highs or a collapse again to lows.
None of this says a lot about path to date, however %B would possibly trace at a transfer to the upside. The device is plotted relying on worth’s share relation to the higher, center, and decrease Bollinger Bands. So long as %B stays above 0.5 it means worth is above the Bollinger Band foundation — which is a 20-month easy transferring common
Though we don’t know which path Bitcoin finally strikes, we do know that one factor is for sure: volatility will return in a serious means. It’s only a matter of when, and the way lengthy we’ve got to attend.
The #Bitcoin 1W Bollinger Bands have been the “tightest in its historical past” for a number of weeks nowhttps://t.co/1Oux6TB537
However there’s much more happening if you happen to activate Bollinger Band Width and %B – two ancillary technical instruments associated to the BB itself
John Bollinger created the… pic.twitter.com/iGVwoBPWrg
— Tony “The Bull” (@tonythebullBTC) August 7, 2023
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