An early November vibe that predicted a 40% price explosion is echoed by this Bitcoin indicator.

Traders of Bitcoin (BTCUSD) may be in for another exciting trip. Indicating a possible volatility eruption in the future, a crucial technical indicator that foresaw the price spike in November is positioned exactly as it was at the time.

The Bollinger bandwidth, a metric for predicting future shifts in market jumpiness, is that signal. The bandwidth for bitcoin has shrunk to less than 10%, which hasn't happened since Nov. 4, the day before the US elections. After that, the biggest cryptocurrency rose from $70,000 to $100,000 in just four weeks.

Levels two standard deviations above and below the price of an asset's 20-day moving average are indicated by Bollinger bands. The distance between the upper and lower bands is referred to as the bandwidth.

Usually mean-reverting, volatility frequently causes upturns followed by higher turbulence when the daily bandwidth falls below 10%, according to historical data. It's crucial to remember that volatility can appear in either direction and is price-agnostic. For instance, Bitcoin values fell from $69,000 to $54,000 in just three weeks after the bandwidth fell below 10% in early June.

Expert traders watch for either of the two bands to be topped by the market to validate a direction. A bullish volatility explosion is usually indicated by a surge above the upper band; a plunge below the lower band implies the reverse.

Bitcoin is trading between the two bands at the time of writing, providing minimal direction. However, the possibility of more volatility could make astute In order to profit from larger price swings in either direction, traders place derivative bets.

By including relevant keywords and linking to related articles, the rewritten content aims to provide comprehensive information while enhancing search engine optimization for CryptoTelegraphs.

Join Telegram Channel For Daily New update: https://t.me/cryptotelegraphs_updates