The price action for XRP and Bitcoin (BTC) looks like a tightly compressed spring on the brink of removing a sudden energy release.
That’s the message from a key -level indicator called Bollinger bandwidth. Bollinger bands are volatility tapes set to plus two and minus two standard deviations over and during the 20-period sliding average (SMA) of an asset market price. The bandwidth measures the space between these ribbons as a percentage of the 20-day sliding average.
In the case of XRP, Bollinger tape width has narrowed to its lowest level since October 2024 on a 4-hour chart, where each light represents price action for a four-hour period. The 4-hour chart range is quite popular on the 24/7 Crypto Market, allowing traders to analyze and predict short-term price movements. Bitcoin’s 4-hour chart mirrors Bollinger tape width pattern in XRP.
The long-standing belief is that tighter bolling ribbon width that reflects a quiet period on the market looks like a compressed spring ready for significant movement.
During these quiet phases, the market accumulates energy, which is eventually released when a clear direction is established, often leading to dramatic joints or sharp price drop/ both XRP and Bitcoin increased in November-December after an extended range period leaving their bandwidth at levels comparable to those observed today.
That said, tighter bands do not always indicate a bullish volatility explosion; They can also predict a sale. For example, in October 2022, the band tightened and signaled a significant step ahead, which materialized on the disadvantage after FTX went into bust.
It is back to see if this recent spring compression will trigger bullish volatility or lead both tokens to a tail spin. The recent Hawkish comments from the Federal Reserve President Jerome Powell and the sale of some whales favors the latter.
Stay aware!
