Bollinger Band Indicator Bulge and Squeeze Analysis
The BTCUSD CryptoCurrency Bollinger Band are self adjusting which means the bands widen and narrow depending on bitcoin price volatility.
Standard Deviation is the statistical measure of the bitcoin price volatility used in calculating the widening/narrowing of the bitcoin Bollinger bands. Standard deviation will be higher when bitcoin prices are changing substantially & lower when the btcusd market bitcoin prices are calmer.
- When bitcoin price volatility is high the Bollinger Band widen.
- When bitcoin price volatility is low the Bollinger Band narrows.
The Bollinger Bands Squeeze
Narrowing of bitcoin Bollinger Band is a sign of bitcoin price consolidation & is known as the Bollinger band squeeze.
When the Bollinger Band cryptocurrency indicator display narrow standard deviations it is usually and generally a time of bitcoin price consolidation, and it is a signal that there'll be a bitcoin price breakout and it shows bitcoin traders are adjusting their trade positions for a new move. Also, the longer the bitcoin prices stay within the narrow bands the greater the chance of a bitcoin price breakout.
Bollinger Squeeze - The Bollinger Band Squeeze - How to Crypto Trade Bollinger Band Squeeze
The Bollinger Bulge
The widening of Bollinger Band is a sign of a bitcoin price breakout & is known as the Bollinger Band Bulge.
Bollinger Band that are far apart can serve as a signal that a bitcoin trend reversal is approaching. In the Bollinger bands indicator example shown below, the bitcoin Bollinger bands get very wide as a result of high bitcoin price volatility on the down swing. The btcusd crypto trend reverses as btcusd crypto prices reach and get to an extreme level according to statistics and the theory of normal distribution. The "bulge" predicts the change to a crypto downwards trend.
Bollinger Bulge - The Bollinger Bulge - How to Crypto Trade Bollinger Bands Bulge
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