Bollinger Bands Flash Warning: Is Bitcoin Set for Its Next Big Rally?
According to a crucial indication, the price of Bitcoin may soon increase in volatility, which could result in the cryptocurrency’s next leg rising. The Bollinger Bands, which are volatility bands positioned two standard deviations above and below the 20-week simple moving average of the price of cryptocurrencies, serve as the basis for this indicator.
MACD Confirms Bullish Volatility: Bitcoin Set for Major Upside?
A widening gap is an indication of increased market activity and volatility, which has been seen before major increases in Bitcoin prices. Less activity is indicated when the gap is smaller.
The MACD histogram associated with the same gap has turned positive, suggesting that the gap—also referred to as the Bollinger Band spread—may soon widen in a bullish manner. The MACD histogram may identify periods of calm and turbulence by using the spread between the Bollinger Bands as input to produce bullish or bearish volatility signals.
Is Volatility Surge Incoming? Bitcoin Chart Mirrors 2020 and 2024 Rallies
The upper pane shows the weekly open, high, low, and close of Bitcoin in candlestick format (per UTC). With the MACD connected to the spread in the lower pane, the middle pane shows the spread, or the space between the Bollinger Bands.
Now that the MACD has turned positive, there is a renewed possibility of a spread or volatility boom. Because volatility is, by nature, price-agnostic, upcoming activity may be either bullish or bearish. However, a closer examination of the preceding chart shows that important bull runs, such as the price surges in late 2020 and late 2024, were predicted by earlier positive crosses of the MACD (shown by vertical lines).
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