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A lot has been stated in current weeks concerning 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 value motion might proceed for lots longer.
Document-Breaking Low Volatility State May Proceed Longer
Bitcoin value is at a standstill in comparison with its normally explosive self. It’s remained locked in a good buying and selling vary, to the purpose the place even a $300 transfer to both aspect would possibly really feel like a serious breakout.
Few factors all through historical past on decrease timeframes have ever been this quiet. That is based on the weekly Bollinger Bands and Bollinger Band Width readings.
Excessive tightening within the Bollinger Bands suggests what’s a referred to as a Squeeze setup — a state of affairs the place following a low volatility section of narrowing, the bands then increase and launch a wave of volatility. It may very well be loads 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 file tightness, utilizing the exact same software on the month-to-month timeframe, exhibits that that there may very well be loads 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 route to date, however %B would possibly trace at a transfer to the upside. The software is plotted relying on value’s share relation to the higher, center, and decrease Bollinger Bands. So long as %B stays above 0.5 it means value is above the Bollinger Band foundation — which is a 20-month easy transferring common
Though we don’t know which route Bitcoin in the end 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 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 may be much more happening in case you 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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