In April 2016 and July 2023, Bitcoin's Bollinger Bands reached their two narrowest points in history, after which the price experienced significant increases. Now, Bitcoin's Bollinger Bands have contracted to the narrowest level again, indicating a major price movement is imminent.
Bollinger Bands are an indicator used to measure price volatility and trend direction. When the Bollinger Bands contract to their narrowest level, it is commonly referred to as a 'Bollinger Squeeze,' indicating that the market is in a low-volatility state, potentially creating conditions for a strong breakout.
However, the contraction of the Bollinger Bands can only indicate the possibility of volatility, without predicting the direction, meaning the market could experience a significant increase or a sharp decline. But based on past price movements, in nine cases of Bitcoin's Bollinger Band contraction, there were increases in seven of them.