A lot has been stated in latest 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 may proceed for lots longer.
Document-Breaking Low Volatility State Might Proceed Longer
Bitcoin value is at a standstill in comparison with its often 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 may really feel like a significant breakout.
Few factors all through historical past on decrease timeframes have ever been this quiet. That is in line 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
Analyzing Month-to-month Bollinger Band Width
Whereas the weekly is at report tightness, utilizing the exact same instrument on the month-to-month timeframe, reveals 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 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 this point, however %B may trace at a transfer to the upside. The instrument is plotted relying on value’s proportion 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 path Bitcoin finally strikes, we do know that one factor is for sure: volatility will return in a significant method. It’s only a matter of when, and the way lengthy we now have 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 occurring 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