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Join on Telegram Mohammedia – Bitcoin’s price has entered a notably calm phase, trading within a narrow range for the past two weeks, a period that market data shows has historically been followed by sharp price movements.
Since mid-December, bitcoin has largely moved between $85,000 and $90,000 since mid-December, showing little day-to-day fluctuation.
This tight range has caused a key market indicator known as Bollinger Bands to compress to their narrowest level in several months, according to data from TradingView.
Bollinger Bands track how volatile an asset is by placing upper and lower limits around its average price. When those limits draw closer together, it signals reduced price movement.
At present, the distance between bitcoin’s upper and lower Bollinger Bands has shrunk to less than $3,500, the smallest gap since July.
This reflects a market that has grown unusually quiet after weeks of consolidation, with buyers and sellers largely balanced.
Market history shows that similar periods of low volatility have often been followed by large price swings. In late July, bitcoin moved sideways for about two weeks before entering a prolonged period of wide price fluctuations that lasted several months.
Prices during that phase swung sharply both higher and lower, breaking the calm that preceded it.
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A comparable pattern was also seen in late February, when a narrow trading range was followed by a rapid decline before the month ended.
Bollinger Bands have long been used by traders to measure changes in volatility, and past bitcoin cycles show that extended periods of compression have frequently coincided with the start of more turbulent market conditions.
Data going back several years indicates that these tight phases rarely persist for long without giving way to stronger price action.
Despite the recent stability, trading activity has continued at steady levels, suggesting that market participants remain engaged even as prices hover in a limited range.
Bitcoin has posted modest moves on a daily basis, rising just over 1% in the last 24 hours to trade around $88,600 at the time of writing.
The current environment stands in contrast to the sharp swings seen earlier this year, when rapid price changes became common.
Instead, the market has settled into a holding pattern, reflected clearly in the compressed volatility readings.
