Calm Before The Storm? 7,000% ROI Bitcoin Signal Resurfaces

bitcoin 7000

Bitcoin price gained more than 20% since last Friday, when the top cryptocurrency by market cap retested $20,000, briefly falling below the level.

The calm before the storm might be starting to break, with BTC about to unleash a powerful rally. That’s according to the Bollinger Band Width, which is the second tightest in the history of Bitcoin. The last time this signal appeared, BTCUSD climbed more than 7,000%.

Bitcoin Volatility Drops, But Could Be Calm Before The Storm

Bitcoin is known for its volatility. The cryptocurrency goes on several thousand percent rallies, only do later erase as much as 80 to 90% of it.

For the last several months, BTCUSD hasn’t moved much in relative terms to historical price action, resulting in a lull in the cryptocurrency’s characteristic volatility. That lull is evident in how tight and narrow the Bollinger Bands are on the 2-week timeframe.

The Bollinger Bands are the second-tightest in the history of crypto | BTCUSD on TradingView.com

According to Bollinger Band – a measure of how wide or narrow the Bollinger Bands are at any given moment – Bitcoin is at the second-tightest the bands have ever been. In other terms, volatility is the second-lowest ever on the 2-week timeframe.

The only time the bands were ever this tight before, was in 2015 and the number one crypto asset by market cap went on to rally by 7,500%.

Is An Explosive Bull Rally Coming Soon To Crypto?

Bollinger Band Width only shows one side of the story: volatility at historical lows. It says nothing about the direction Bitcoin might take.

The Bollinger Bands themselves consist of a 20-period simple moving average and two standard deviations. After the bands contract, they expand to release and extreme build up of energy. Simply put, when the bands expand, the breakout will be powerful – strong enough to set the trend.

Staying above the middle-BB is a bullish statement | BTCUSD on TradingView.com

Currently, the 2-week Bollinger Bands are above the mid-line, suggesting that the direction is up. Holding above the level in the past has resulted in some of the largest bull runs in crypto.

In a surprise bounce from last Friday’s under $20,000 retest, Bitcoin held its fourth consecutive candle close above the middle-Bollinger Band and is now making a move higher.

BTCUSD is up 20% already in the last 72 hours. If the Bollinger Bands start to expand, the rally might not stop for some time.

Follow @TonyTheBullBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com
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