Tightening Bitcoin Bollinger Bands forecast explosive price move, but which way?

The Bollinger Bands indicator has narrowed to its tightest level on record, a rare technical setup that analysts say is a sign of a pending directional move.

A key volatility indicator for Bitcoin (BTC) has narrowed to its tightest measurement on record, a pattern that was followed by a multi-month rally in previous bull and bear markets. Will the Bollinger Bands indicator call the market bottom again?

Analyzing the monthly Bitcoin chart, crypto analyst Dorkchicken noted that BTC’s Bollinger Bands are currently at their “tightest” level on record. Such conditions have repeatedly led to bullish breakouts, with the only prior downtrend from similar conditions occurring in 2022, during the drop to $16,000 from $20,000.

Bollinger Bands measure price volatility, and extreme compression often leads to a sharp expansion. The analyst added that there are higher odds of an upside trend once expansion begins.

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