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 value motion might proceed for lots longer.
File-Breaking Low Volatility State May Proceed Longer
Bitcoin value is at a standstill in comparison with its often explosive self. It’s remained locked in a good buying and selling vary, to the purpose the place even a $300 transfer to both facet may really feel like a serious breakout.
Few factors all through historical past on decrease timeframes have ever been this quiet. That is in keeping 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 state of affairs the place following a low volatility part of narrowing, the bands then develop and launch a wave of volatility. It could possibly be rather a lot longer till that occurs, nonetheless.
The month-to-month bands may want additional tightening | BTCUSD on TradingView.com
Inspecting Month-to-month Bollinger Band Width
Whereas the weekly is at document tightness, utilizing the exact same software on the month-to-month timeframe, exhibits that that there could possibly be rather a lot 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 counsel the potential for 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 up to now, however %B may 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 finally strikes, we do know that one factor is for sure: volatility will return in a serious manner. It’s only a matter of when, and the way lengthy we now have to attend.
However there may be much more occurring in the event 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