Bitcoin’s Volatility Set to Increase as Bollinger Bands Suggest Mega Squeeze
Bitcoin has been trading sideways for weeks, but that could change soon as the Bollinger Band Width (BBW) indicator signals a potential mega squeeze. The BBW measures the divergence or convergence of the upper and lower bands of the Bollinger Bands, which are based on price volatility.
Analyst Predicts Imminent Big Move
Crypto analyst HornHairs highlighted the current BBW reading of 0.11, indicating that the bands are tightly close together. This suggests a period of low volatility and precedes a high-volatility phase. HornHairs warned traders to be prepared for a significant move in either direction.
Historical Precedents Indicate Major Price Swings
A mega squeeze, characterized by tight Bollinger Bands convergence, often leads to pronounced market moves. Previous instances of similar BBW lows have resulted in significant price swings for Bitcoin. Traders should take note of these historical precedents when considering the days ahead.
Key Price Levels to Watch
Bitcoin’s price is currently around $42,900, with recent highs at $49,000 and lows at $38,600. These levels will play a crucial role as Bitcoin enters a new phase of market activity driven by the impending breakout signaled by the BBW.
Crypto Analyst Expects Upside Breakout
Crypto analyst CrediBULL anticipates an imminent volatile period and predicts an upward breakout for Bitcoin. The next key resistance level is at $43,340, while support can be found at $39,800.
Hot Take: Bitcoin Volatility Poised to Surge Following Mega Squeeze
The Bollinger Band Width indicator suggests that Bitcoin is on the verge of a major price move. The tight convergence of the Bollinger Bands indicates low volatility, which historically precedes periods of high volatility. Traders should be prepared for a significant breakout in either direction. With key price levels to watch and historical precedents indicating major price swings, the market is poised for an exciting phase of activity. Analysts are divided on the direction of the breakout, but many expect an upward move. Keep a close eye on Bitcoin as it enters this critical phase.
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