Bitcoin’s Bollinger Bands Signal Potential Bullish Trend Ahead

Summary:
Recent analysis using Bitcoin's Bollinger BandWidth indicator suggests the potential for a significant price increase similar to what was experienced in late 2023. While the indicator points to possible bullish momentum, traders remain cautious, seeking more evidence of a sustained recovery in the market.

Key Takeaways:

The Bollinger BandWidth indicator hints at a possible resurgence in Bitcoin's price as the year closes.
Despite recent price fluctuations, the BandWidth did not signal a “red” event.
Traders are looking for stronger signals before fully committing to the market.

Bitcoin Bollinger Bands repeat ‘parabolic’ bull signal from late 2023

Bitcoin’s Bollinger BandWidth Indicates Possible Price Surge

In a recent X thread, macro strategist Gert van Lagen highlighted a significant indication from Bitcoin’s Bollinger BandWidth. This indicator measures the percentage variance between the upper and lower Bollinger bands, and it serves as a leading signal for Bitcoin's price volatility.

Data from various sources, including Cointelegraph Markets Pro and TradingView, reveals that the difference in monthly timeframes has reached an all-time low.

BTC/USD one-month chart with Bollinger BandWidth data. Source: Cointelegraph/TradingView

Historical patterns indicate that the BandWidth rarely dips below 100, and when it does, it typically triggers a sharp response in Bitcoin's price. Van Lagen noted, “Historically, every time this triggers, Bitcoin follows with a direct parabolic leg up.”

BTC/USD one-month chart with Bollinger BandWidth data. Source: Gert van Lagen/X

An accompanying chart displays instances where such a parabolic movement occurred. The last notable “green” signal appeared in early November 2023, subsequently leading to a doubling of the BTC/USD price over four months.

Van Lagen also discussed his expectations for Bitcoin’s future pricing, predicting a final surge to new highs before the market potentially shifts into a bear phase. He drew parallels to GOOGL's performance before the 2008 financial crisis, emphasizing a pattern of declining highs on the Bollinger Bandwidth that may precede bearish volatility.

Cautious Optimism Among Traders

Despite the encouraging signals from the Bollinger Bands, Bitcoin traders are remaining skeptical about the strength of the market recovery this week.

Related: Bitcoin's ‘more reliable’ RSI variant hits bear market bottom zone at $87K
BTC 1W

Recently, BTC/USD hit its highest levels in more than two weeks, approaching $94,000 amid rumors regarding a pro-crypto US Federal Reserve chair. Trader Daan Crypto Trades acknowledged in a post on X that the price reached a higher high and higher low, which could suggest a bullish market structure for the current timeframe.

BTC/USDT perpetual contract four-hour chart. Source: Daan Crypto Trades/X

According to Cointelegraph, the existing price zone is crucial for the yearly candle of 2025, as BTC/USD kicked off the year at $93,500. Trader and analyst Rekt Capital pointed out that Bitcoin has an entire month to achieve a 2% increase to close above the $93,500 Four Year Cycle level, hoping to complete the year as a positive candle.

BTC/USD 12-month chart. Source: Rekt Capital/X

Overall, while the Bollinger BandWidth indicator hints at potential bullish movement, traders are exercising caution as they await further confirmation of a market recovery.