Institutions 'Stop' Selling... Bitcoin's Monthly Bollinger Bands Contract to All-Time Low

▲ Bitcoin (BTC)

The monthly Bollinger Bands for Bitcoin (BTC) have contracted to their narrowest level ever, highlighting the potential for significant volatility. While the price is still hovering in the mid-$76,000 range, analysis suggests that a strong directional move could emerge once the long period of consolidation within a narrow range ends.

U.Today reported on May 22 (local time) that Bitcoin's monthly Bollinger Bands have contracted to their tightest level in history. Cryptocurrency trader Josh Olszewicz stated on X (formerly Twitter) that Bitcoin's monthly Bollinger Bands are “the tightest they’ve ever been.”

Bollinger Bands are a volatility indicator developed by financial analyst John Bollinger. They form upper and lower bands around a simple moving average, and the width of the bands indicates how far the price deviates from the average. When a particular asset remains within a narrow price range for an extended period, the upper and lower bands move closer together, a phenomenon known as a squeeze in the market.

According to the article, the band width for Bitcoin on a monthly basis, as shown in the chart shared by Olszewicz, has dropped to a historical low. U.Today stated that this prolonged period of sideways movement could lead to powerful volatile price action.

Despite broad market volatility, Bitcoin has maintained a relatively stable trend on a daily basis. Cryptocurrency commentator 360Trader stated that Bitcoin is holding the $76,865 support level despite the strong US dollar.

360Trader analyzed that Bitcoin is currently forming a bullish higher high, higher low structure on the chart. He explained that this indicates institutional investors are holding or accumulating positions rather than selling during upward moves.

U.Today reported that if Bitcoin successfully defends this key psychological and technical support level, it could embark on an impressive rally. The all-time low contraction of the monthly Bollinger Bands and the defense of the $76,865 support level have emerged as variables that will determine Bitcoin's next major move.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*