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Bollinger Band Width Analysis for Bitcoin & Trading Signals from Bollinger Bands Width

Developed by John Bollinger.

This btcusd technical indicator is derived from the initial Bollinger indicator.

Bandwidth is a measure of width of Bollinger Band

Calculation

Band-width = Upper Band - Lower Band

Middle Band

Bollinger Bandwidth Crypto Tool - Review Bollinger Bandwidth on BTCUSD Charts

This is an oscillator indicator for trading. It bases on the idea that bitcoin price and volatility cycle.

Periods of high volatility are followed by periods of low market volatility.

During periods of high volatility, the bands are widely spaced, resulting in a broad band-width.

Low volatility makes bands narrow, but the bandwidth indicator stays wide.

The line colored blue illustrates the maximal Band-width value recorded across a defined preceding sequence of periods.

This line also identifies the periods of high volatility

The line shaded red signifies the lowest calculated Band-width measurement observed across a predetermined preceding count of time intervals.

This line also identifies the periods of low market volatility

BTCUSD Analysis and How to Generate Trading Signals

Consolidation - Bollinger Squeeze

The Bollinger Band-width metric is employed to pinpoint periods of market indecision, known as a squeeze, which is a phase of price consolidation in bitcoin, typically preceding a significant price breakout in any direction.

Signals are triggered when a genuine Bitcoin price breakout occurs. A signal is generated by the indicator initiating an upward trajectory after it has touched the red line. When the bandwidth line begins to ascend, this action signals an increase in volatility concurrent with the Bitcoin price breaking out of its established range.

Bollinger Bandwidth Squeeze in Bitcoin - Check Bollinger Bandwidth on BTCUSD Trades

Squeeze

Breakouts After Bollinger Squeeze - Band Width Signals in Crypto

Break Out Signal After Band-width Squeeze

But, this indicator doesn't show direction and needs to be used with another indicator, like the moving average, to understand and find the direction of the trend or Break Out.

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