Bitcoin market volatility has hit three-month lows – marking a price squeeze that could soon pave the way for a big move on either side.
The spread between bitcoin’s Bollinger bands – volatility indicators placed two standard deviations above and below the 20-day moving price average – narrowed to $895 on Monday. That’s the lowest level since Jan. 6, when the spread was $636, according to Bitstamp data.
Bitcoin has spent a better part of the last two weeks trading the range of $6,450–$7,450, with the range further narrowing to $7,000–$7,300 since Thursday.
The tightening of Bollinger Bands is widely considered to be an advanced indicator of an impending big move.
“When it tightens, it is because we have been consistently trading in a narrower range for a prolonged period and we should see a breakout very soon,” said Chris Thomas, head of digital assets at Swissquote