Bitcoin Price Analysis: Volatility Bands Tighten, Big Move Likely

Bitcoin’s price volatility has wilted due to cryptocurrency’s ongoing sideways churn in the range of $8,465 to $8,735 (Coinbase data). 

Bollinger bands – envelopes plotted +2 and -2 standard deviation level above and below the 20MA – have tightened sharply on the 1H chart. 

The tightening of the bands indicates low volatility, which in turn enables more risk trading. Hence, extended periods of low volatility often end with a violent bullish/bearish move. 

1H chart

At the time of writing, the upper and lower bands are located at $8,662 and $8,612, respectively. 

A convincing move through the upper band would imply bullish breakout and could fuel a quick move toward $8,900 and possibly to $9,000.

On the other hand, a break below the lower band would pave the way for an extension of the sell-off from the weekend’s high above $9,000 toward deeper support levels located in the range of $8,200-$8,000.