A key technical indicator for Bitcoin is signaling that a period of significant price movement is likely ahead. The weekly Bollinger Bands, which measure market volatility, have tightened to their narrowest point in history.
This compression suggests that the market is coiling up for a potential breakout. Analyst Mr. Anderson stated that when volatility contracts this tightly, a sharp expansion always follows. He expects Bitcoin to test the upper or lower bands quickly once the move begins.
Nassar Achkar, Chief Strategy Officer at CoinW, described the situation as “the calm before a significant volatility storm.” He pointed to factors like ETF inflows and seasonal trends as potential drivers for a bullish surge.
However, analysts are divided on which direction the price will break. Some experts caution that low volatility does not guarantee an upward move. While one analyst noted that such extreme compression rarely resolves quietly, another from Glassnode argued that decreasing volatility is a sign of a maturing market and may not be a predictive signal.
History provides some clues. The last time a similar squeeze occurred was in early July, when Bitcoin was trading near $108,000. That period was followed by a sharp volatility spike that pushed the price to a new all-time high above $122,000 by mid-July.
Traders are now watching to see if the next move will be a downward shakeout toward $100,000 or a seasonal rally. Historical data shows that Bitcoin has finished October with a price increase in 10 of the last 12 years, giving the month a bullish reputation in the crypto market.