Bitcoin Bollinger Bands Call for Record Volatility After 3.7% Fall in October


Important points:

  • Bitcoin’s October performance was its worst since 2018 as traders became cautious about the outlook.

  • Despite macro tailwinds, ETF outflows are returning as derivatives traders hedge their risks.

  • Bollinger Bands data suggests that BTC price volatility will recover significantly.

Bitcoin (BTC) traded at around $110,000 on Saturday as traders remained bearish after the failed Uptober.

BTC/USD 1 hour chart. Source: Cointelegraph/TradingView

Bitcoin demand “weakness” caps off Uptober

Data from Cointelegraph Markets Pro and TradingView showed that BTC price has recovered from losses in Friday’s Wall Street trading.

This started with selling pressure involving both US exchanges and spot Bitcoin exchange-traded funds (ETFs), a phenomenon we have seen frequently throughout this week.

On-chain analytics platform Glassnode said the ETF outflow highlights “increasing selling pressure from TradFi investors and renewed weakness in institutional demand.”

Friday’s outflows were $191 million, following Thursday’s $488 million outflows, according to data from UK-based investment firm Farside Investors.

US spot Bitcoin ETF netflow (screenshot). Source: Farside Investors

Glassnaud went on to point out that the market had shrugged off the macro tailwind of the US Federal Reserve’s interest rate cuts.

“The Fed cut rates as expected, but the hawkish tone in December dampened optimism,” he told X Followers.

“The initial rally has subsided as traders return to cautious mode, and this change is clearly reflected in the BTC options market.”

Traders are similarly cautious, with crypto investor and entrepreneur Ted Pillows calling the current setup for Bitcoin “time-based capitulation.”

“Bitcoin’s time-based capitulation is happening now. But for that to happen, Bitcoin needs to stabilize above $100,000,” he warned on Friday.

“If the weekly close is below this level, the downtrend will be confirmed.”

BTC/USDT 2-day chart. Source: Ted Pillows/X

Meanwhile, trader Daan Crypto Trades said a real move could only occur if BTC price decisively crosses the top or bottom of its regional range. There were two primary interest levels: $107,000 and $116,000.

Bollinger Bands will next predict BTC price volatility

Therefore, the October monthly candlestick resulted in a disappointing 3.7% decline in BTC/USD, its worst result since 2018.

Related: Bitcoin Set for First Red October in 7 Years: What Will November Bring?

As reported by Cointelegraph, November is traditionally Bitcoin’s best-performing month, with CoinGlass data confirming a massive 42.5% average increase since 2013.

BTC/USD monthly returns (screenshot). Source: Coinglass

When discussing this topic, commentator Matthew Hyland added that the Bollinger Bands volatility indicator continues to suggest record volatility is on the way.

“Monthly Bollinger Bands have reached the most extreme levels in the entire history of Bitcoin,” he wrote on X.

1 month chart of BTC/USD with Bollinger Bands data. Source: Matthew Hyland/X

The narrowing of Bollinger Bands has long been a focus of market participants.

Last month, the index’s creator, John Bollinger, said there would soon be a “time to pay attention” to the volatility of both Bitcoin and major altcoins.

This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.