Bollinger bands are volatility bands placed two standard deviations above and below

Bitcoin’s Bollinger bandwidth has declined to 20% on the weekly chart, a level last seen days before BTC exited its then multi-month trading range of $25,000 to $32,000 in late October. Prices topped the $40,000 mark by year-end and rose to record highs above $70,000 in March this year.

Traders bored of bitcoin (BTC)’s range-ridden days might want to return to their computer screens. An indicator called “Bollinger bandwidth” that successfully predicted the late 2023 volatility boom is glowing brightly again.

Bollinger bands are volatility bands placed two standard deviations above and below the 20-day/week simple moving average of an asset’s price. The bandwidth, an unbound oscillator, is derived by dividing the spread between the volatility bands by the 20-period SMA.

Bitcoin’s Bollinger bandwidth has declined to 20% on the weekly chart, a level last seen days before BTC exited its then multi-month trading range of $25,000 to $32,000 in late October. Prices topped the $40,000 mark by year-end and rose to record highs above $70,000 in March this year.