A Bitcoin indicator that traders use to assess volatility has reached an important inflection point, indicating the potential for a significant price movement.
Trader and cryptocurrency analyst Matthew Hyland pointed out that the Bollinger Band indicator of Bitcoin — a tool used to measure momentum and volatility of an asset over a certain period — has reached a “maximum squeeze” in the monthly time frame since its launch in January 2009.
Monthly chart of BTC/USD | Source: Matthew HylandHe is not the only trader who has noticed this pattern.
“The Bollinger Band indicator of Bitcoin on the monthly chart is currently at a historically tight level,” renowned analyst Crypto Ceasar stated, emphasizing that:
“This has previously led to strong upward fluctuations. Bitcoin may be preparing for a lively fourth quarter.”
Cryptocurrency investor Giannis Andreou stated in a post on X last week that previous downturns in 2012, 2016, and 2020 all “preceded explosive bull runs,” adding that the current situation is even tighter, indicating the potential for BTC prices to experience the largest volatility ever.
“Great volatility is ahead!”
This is not the first time in the bull market that the Bollinger Band indicator has signaled a strong bullish potential for BTC. As Bitcoin Magazine reported, in early July, a squeeze on the three-day chart prevented the upward momentum to reach the current all-time high of over 124,500 dollars achieved on August 14.
The cup and handle pattern of Bitcoin aims for 300,000 USD
According to Bitcoin Magazine, many factors are putting Bitcoin in a favorable position to continue rising in price despite unsuccessful efforts to maintain a recovery above 112,000 USD recently.
In addition to the upcoming Fed interest rate cuts and optimistic on-chain indicators, Bitcoin may reflect the surge in gold prices and regain momentum towards $185,000 and beyond.
Demand from institutions through Bitcoin ETF funds and treasury companies continues to bolster the bullish potential of Bitcoin, as Bitcoin ETF inflows turned positive on Monday.
“Money is flowing back into Bitcoin ETF funds at a rapid pace as retail investors grow impatient with the cryptocurrency market,” market analysis firm Santiment stated in a post on X on Wednesday, also highlighting:
“Previous cryptocurrency price surges have been driven by similar influxes of capital.”
The ETF Bitcoin spot inflow | Source: SantimentThe monthly chart shows that the price of Bitcoin has surpassed the neckline of the cup and handle pattern at $69,000 in November 2024. It is still in the process of confirming the breakout and may rise to complete the maximum gap between the bottom of the cup and the neckline.
This sets the breakout target of the cup and handle pattern for Bitcoin at approximately 305,000 USD for the year 2025–2026, an increase of over 170% from the current price.
BTC/USD monthly chart | Source: TradingViewHowever, it is important to note that a cup and handle pattern does not always guarantee a full price increase. A study by veteran analyst Thomas Bulkowski shows that only 61% of these setups achieve the expected target.
According to Bitcoin Magazine, Bitcoin is currently in the middle of the correction phase of the classic bull cycle after all-time highs, likely to bottom out around 104,000 USD before a new bullish run.
Mr. Teacher
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