Bitcoin’s low volatility reading may be forewarning a significant move
The weekly bitcoin chart shows signs of low volatility. For example, consider the Bollinger Bands Width indicator (BBW) beneath the price chart. It is currently at 0.37 (green rectangle). A drop below the red dashed horizontal line at 0.4 indicates a noticeable reduction in the cryptocurrency's volatility. Bollinger's theory suggests that volatility squeezes are precursors to expansion in volatility.
However, it says little about the direction of the ensuing breakouts. The red dashed vertical lines indicate the times that the BBW increased above 0.4, matched with an expansion to the downside. The blue dashed verticals show the time that jumps to the upside accompanied the increase above 0.4.
Given the current reading, we are watching for the BBW to move above 0.4. Again, adding a trend-following indicator will be helpful here to help determine the direction of the breakout.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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