Opinion: Bitcoin's volatility range has compressed to a new level of price fluctuation

On January 2nd, according to Coindesk, over the past two weeks, Bitcoin's price has been fluctuating narrowly between $85,000 and $90,000. Based on TradingView data, the difference between its Bollinger Bands (volatility bands, positioned at two standard deviations above and below the 20-day simple moving average of the asset price) has narrowed to below $3,500, the lowest level since July.
This so-called Bollinger Band squeeze indicates that the market is in a low-volatility period, accumulating energy in preparation for the next large price movement. Historical experience shows that such squeezes are often followed by sharp price volatility.
For example, the last Bollinger Band squeeze in late July ended a two-week sideways consolidation between $115,000 and $120,000. This squeeze paved the way for the subsequent three months of expansion, with prices fluctuating violently between $100,000 and $126,000.
A similar pattern also appeared in late February: prices fluctuated between $94,000 and $98,000, the Bollinger Bands narrowed, and then by the end of the month, the price fell to $80,000.