Bitcoin has been unusually calm lately, which has been a topic of discussion in recent weeks. According to weekly timeframes, volatility measures are currently at their lowest levels ever. However, it's important to note that the lack of direction in the sideways price action could persist for an extended period of time.
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Low volatility Bitcoin could last longer. Record-Breaking Low Volatility State Could Continue Longer
The current price of Bitcoin remains relatively stable and has not experienced its usual high volatility. It has been trading within a narrow range, with even a $300 increase or decrease considered a significant move. This is evident from the Bollinger Bands and Bollinger Band Width readings, which indicate that historical low points have rarely been this quiet. The extreme tightening of the Bollinger Bands suggests a Squeeze setup, where the bands will eventually expand and release a wave of volatility, but it may take some time for this to happen. Low volatility Bitcoin could last longer.
Examining Monthly Bollinger Band Width
The Bollinger Band Width is currently at a record tightness on the weekly timeframe, but when looking at the monthly timeframe, there may still be room for further movement. The Width is not as low as it has been during previous bull runs, indicating the possibility of a prolonged period of sideways movement before either a significant breakout to new all-time highs or a collapse back to lows.
As for direction, %B may suggest a move to the upside. This tool is plotted based on the price's percentage relationship to the upper, middle, and lower Bollinger Bands. As long as %B remains above 0.5, the price is above the Bollinger Band basis, which is a 20-month simple moving average.
While it is uncertain which direction Bitcoin will ultimately move, one thing is certain: volatility will return in a significant way. The only question is when and how long we will have to wait.
The #Bitcoin 1W Bollinger Bands have been the "tightest in its history" for several weeks nowhttps://t.co/1Oux6TB537 But there is a lot more going on if you turn on Bollinger Band Width and %B – two ancillary technical tools related to the BB itself John Bollinger created the… pic.twitter.com/iGVwoBPWrg
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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