It looks like Bitcoin (BTC) might be gearing up for a major price change soon. One key indicator, the weekly Bollinger Bands, has reached its narrowest point in a year. The last time we saw this, Bitcoin’s price shot up by 20%.
What Are Bollinger Bands?
So, what are Bollinger Bands? They’re a tool that traders use to measure market momentum and volatility. Imagine them as a pair of elastic bands around Bitcoin’s price. When the bands are wide, the market is volatile. When they squeeze tight, like they are now, it means the market is calm but could burst into action soon.
Expert Insights
Analyst Matthew Hyland says we should brace ourselves for a big move. “A move is almost inevitable,” he points out, referring to the Bollinger Bands’ current state. This compression has reached its third-highest point ever, suggesting Bitcoin might be ready to jump.
#BTC Weekly Bollinger bands reached there tightest points last year at the end of July
Seeing the same thing once again: pic.twitter.com/VDXDb6SWKQ
— Matthew Hyland (@MatthewHyland_) July 31, 2024
Remember back in August 2023? Bitcoin climbed from around $24,000 to over $45,000 in just a few months, and then kept going past $70,000. We are wondering if we’re about to see something similar.
The Waiting Game
Since mid-March, Bitcoin has been stuck in a tight range, swinging between a high of nearly $74,000 and a low of $55,000. But Hyland believes this quiet period is ending. It’s starting to squeeze, so the moment is approaching, according to the analyst. Historically, when the Bollinger Bands get this tight, a big price move usually follows within weeks.
What to Expect
We might need to be a bit patient, but it’s looking almost certain that Bitcoin will break out of this phase soon. The longer we wait, the bigger the move might be. But which way will it go? That’s still up in the air. In past situations like this, the breakout was mostly upwards, but there are no guarantees this time. If the prediction of PlanB, the creator of the popular Stock-to-Flow model (S2F) is to come true, we’ll be hitting a Bitcoin price of up to $140,000 within a few months, suggesting an upward break out.
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