Share this article
Bitcoin Indicator That Forewarned Late 2023 Volatility Explosion Is Lighting Up Again
Bitcoin's Bollinger bandwidth has narrowed to levels that have historically preceded volatility explosions.
Aug 1, 2024, 11:15 a.m.
Make us preferred on Google
- The gap between bitcoin's volatility bands has narrowed to 20%.
- A similar reading preceded Bitcoin's late 2023 surge.
Traders bored of bitcoin 's range-ridden days might want to return to their computer screens. An indicator called "Bollinger bandwidth" that successfully predicted the late 2023 volatility boom is glowing brightly again.
Bollinger bands are volatility bands placed two standard deviations above and below the 20-day/week simple moving average of an asset's price. The bandwidth, an unbound oscillator, is derived by dividing the spread between the volatility bands by the 20-period SMA.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Bitcoin's Bollinger bandwidth has declined to 20% on the weekly chart, a level last seen days before BTC exited its then multi-month trading range of $25,000 to $32,000 in late October. Prices topped the $40,000 mark by year-end and rose to record highs above $70,000 in March this year.
The latest reading of 20% follows four months of trading between $60,000 and $70,000, barring occasional brief dips to $55,000.
The bandwidth flashed a similar reading ahead of the volatility explosions in November 2018, October 2016, mid-105 and mid-2012, as CoinDesk discussed in October.
Volatility is said to be mean-reverting. So, a narrower bandwidth, representing price stability, often precedes a breakout in either direction or burst of volatility. On the flip side, high bandwidth indicates a cooling period on the horizon.
More For You
Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
What to know:
Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
More For You
Gold in 'extreme greed' sentiment as it adds entire bitcoin market cap in one day
Bullion ripped past $5,500 and sentiment gauges hit “extreme greed,” while bitcoin stayed pinned below $90K — a split that’s getting harder to ignore.
What to know:
- Gold’s surge above $5,500 an ounce has taken on the feel of a crowded trade, with its notional value jumping about $1.6 trillion in a single day.
- Sentiment gauges such as JM Bullion’s Gold Fear & Greed Index are signaling extreme bullishness in precious metals, even as similar crypto indicators remain stuck in fear.
- Bitcoin is lagging despite the “hard assets” narrative, trading like a high-beta risk asset while investors seeking a store of value are favoring physical gold and silver over digital tokens.
Top Stories
