The price action for XRP and Bitcoin (BTC) resembles a well compressed spring to the edge of unwinding with a sudden release of energy.
That is the message of a key volatility indicator called Bollinger bandwidth. Bollinger bands are volatility bands established in more two and less two standard deviations above and below the mobile average of 20 periods (SMA) of the market price of an asset. The bandwidth measures the space between these bands as a percentage of the 20 -day mobile average.
In the case of XRP, Bollinger’s bandwidth has been reduced to its lowest level since October 2024 in the 4 -hour table, where each candle represents the price action for a period of four hours. The 4 -hour graphic interval is quite popular in the 24/7 cryptographic market, which allows merchants to analyze and predict short -term price movements. The 4 -hour Bitcoin graph reflects the Bollinger bandwidth pattern in XRP.
The long data belief is that the most tight Bollinger bandwidth, which reflects a quiet period in the market, is similar to a compressed spring ready for a significant movement.
During these quiet phases, the market accumulates the energy that is finally released once a clear direction is established, which often leads to dramatic manifestations or decreases in strong prices/ both XRP and Bitcoin increased in November-December after an extended scope period that left its bandwidth at levels comparable to those observed today.
That said, the strictest bands do not always indicate an explosion of bullish volatility; They can also presage a massive sale. For example, the bands hardened in October 2022, pointing out a significant movement ahead, which materialized at the disadvantage after FTX broke.
It remains to be seen if this last spring compression will trigger the bullish volatility or lead both tokens to a tail. The recent aggressive comments of the President of the Federal Reserve, Jerome Powell, and sell for some whales favor the latter.
Stay alert!
