Price action for XRP and Bitcoin (BTC) looks like a narrowly compressed spring on the point of fembling with a sudden release of energy.
This is the message of a key volatility indicator called Bollinger Bandwidth. Bollinger strips are volatility bands fixed by more than two and minus two standard deviations above and below the mobile average at 20 periods (SMA) of the market price of an asset. The bandwidth measures the space between these percentage strips of the 20 -day mobile average.
In the case of XRP, the Bollinger’s bandwidth has shrunk at its lowest level since October 2024 on the 4 -hour table, where each candle represents prices for a period of four hours. The 4 -hour card interval is very popular on the 24/7 cryptography market, allowing traders to analyze and predict short -term price movements. The graph of 4 hours of Bitcoin reflects the width pattern of the Bollinger band in XRP.
The longtime belief is that a tighter Bollinger strip width, reflecting a period of calm on the market, is similar to a compressed spring ready for a significant movement.
During these calm phases, the market accumulates the energy which is finally released once a clear direction is established, often leading to spectacular rallies or to net price reductions. XRP and Bitcoin jumped in November-December after an extensive period linked to the beach which left its bandwidth at levels comparable to those observed today.
That said, the stricter bands do not always indicate an explosion of upward volatility; They can also foreshadow a sale. For example, the bands were tightened in October 2022, signaling a significant movement, which materialized downwards after FTX went bankrupt.
It remains to be seen if this last spring compression will trigger the upward volatility or will lead the two tokens in a fall. The recent Hawkish comments of the president of the Federal Reserve Jerome Powell and the sale by certain whales favor the latter.
Stay vigilant!
