Bitcoin is set to experience a "parabolic" reaction as a classic volatility indicator has reached a historic low.
Key Points:
The Bollinger Band width indicator for Bitcoin provides hope for a price surge similar to the end of 2023.
Despite recent pullbacks in Bitcoin's price, the bandwidth has still avoided "red" events.
Traders are seeking more evidence to prove that the market rebound is sustainable.
In a post on X on Wednesday, macro strategist Gert van Lagen showcased a key signal from Bitcoin's Bollinger Band width.
Bollinger Band width measures the percentage difference between the upper and lower Bollinger Bands, while the bands themselves are a leading indicator of Bitcoin's price volatility.
At the monthly level, data from sources including Cointelegraph Markets Pro and TradingView shows that this difference has never been so small.
History shows that the bandwidth rarely drops below its scale of 100, but each time it does, the BTC price reacts violently.
"Historically, every time this signal is triggered, Bitcoin goes straight up parabolically," Van Lagen commented.
The accompanying chart shows precedents for such parabolic outcomes. The last "green" signal appeared in early November 2023, after which BTC/USD doubled within four months.
Continuing, Van Lagen mentioned his expectations for future BTC prices, involving a final push to new highs before the next Bitcoin bear market begins.
"This setup is similar to GOOGL before the last wave before the 2008 financial crisis. A series of lower highs on the Bollinger Band width was broken to drive the subsequent bearish HTF volatility," he wrote.
Despite initial signs of recovery, Bitcoin traders remain skeptical about market strength this week.
$BTC 1W Still just a breakdown & retest scenario until proven otherwise. Still going to plan. Volume is low, MACD/RSI needed a reset on 1D and below, + we dropped 45k with no bounce. I wouldn’t get loud on calling a bottom quite yet. https://t.co/VW0b0VF8IF pic.twitter.com/Rerl1KTvOW
On Wednesday, Bitcoin/USD reached its highest level in over two weeks, driven by rumors of a pro-crypto U.S. Federal Reserve Chair, targeting $94,000.
"The price has made higher highs and higher lows, so technically, this timeframe has turned bullish again," trader Daan Crypto Trades posted on X.
As Cointelegraph reported, the current spot price area is significant for the 2025 annual candlestick, with BTC/USD starting the year at $93,500.
"Bitcoin has a full month to achieve a 2% increase to close above the ~93,500 four-year cycle level at the end of the month and finish the year with a green candlestick," trader and analyst Rekt Capital noted on Tuesday.
Related: Bitcoin (BTC) surges to $93,000 after Sunday pullback, analysts eye $100,000 mark
Original article: “Bitcoin (BTC) Bollinger Bands Reproduce Parabolic Bull Signal from Late 2023”
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