Bitcoin Volatility Seen Returning as Trend Gauge Rebounds
Bitcoin has traded near $63,000 in a narrow range as buyers and sellers struggle to establish control. The Average Directional Index, or ADX, measures the strength rather than the direction of a trend, with readings below 20 commonly viewed as signaling a trendless market. Such periods of compressed volatility can precede sharper price moves as positioning builds and momentum eventually returns.
Bitcoin’s daily ADX has fallen to 17.80, placing the market below the threshold associated with a clear trend while momentum remains nearly exhausted. Analysts said the gauge has nevertheless risen from depressed levels for four consecutive days, suggesting volatility may soon revive and force a directional break. The indicator does not predict whether the next move will be higher or lower, leaving traders focused on confirmation beyond the recent $63,000 range.
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The history behind this eventBitcoin Volatility Squeeze Sets Stage for Sharp Breakout
Bitcoin’s unusually quiet trading has drawn attention to Bollinger Bands, a volatility gauge developed by technical analyst John Bollinger. The indicator plots bands two standard deviations above and below an asset’s 20-day simple moving average. A sharp contraction signals consolidation rather than price direction, but traders often treat such a squeeze as a warning that pent-up market pressure could soon produce a substantial move either higher or lower.
TradingView data showed Bitcoin’s Bollinger bandwidth fell to 0.04 on July 12, 2023, its lowest since early January, as the cryptocurrency consolidated near $30,500. Analyst Josh Olszewicz said squeezes of comparable magnitude had occurred only a handful of times over the previous decade. Traders were also awaiting the U.S. Bureau of Labor Statistics’ June consumer-price report that day, viewing the inflation release as a potential catalyst for a break from Bitcoin’s narrow range.
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