Crypto traders aiming to profit from a volatility surge should watch the Binance-listed ether-bitcoin (ETH/BTC) ratio, which could soon experience wild swings, according to a key indicator called Bollinger Bands.
Bollinger Bands are volatility bands placed two standard deviations above and below the 20-day simple moving average of an asset’s price.
The so-called Bollinger band squeeze occurs when the bands contract tightly around the price, suggesting low volatility and a period of consolidation. The market typically builds energy during the squeeze, which is eventually released in either direction, leading to a volatility explosion.
The Bollinger Bands on the ETH-BTC chart are now the tightest they have been since June 2020, according to TradingView.
The squeeze indicates that ether could soon experience increased volatility against BTC. Traders watch closely to see which way the price breaks out of the bands because, often, the big move happens in the same direction.
The volatility
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