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XRP, Bitcoin Bollinger Bands Narrow to 2024 Lows, Signaling Potential Volatility

Coin WorldSunday, Apr 20, 2025 8:47 am ET

1min read

XRP and bitcoin (BTC) are currently exhibiting price movements that resemble a tightly compressed spring, poised for a significant release of energy. This observation is based on the Bollinger bandwidth, a key volatility indicator. Bollinger Bands are volatility bands set at plus two and minus two standard deviations above and below the 20-period moving average (SMA) of an asset's market price. The bandwidth measures the space between these bands as a percentage of the 20-day moving average.

For XRP, the Bollinger bandwidth has narrowed to its lowest level since October 2024 on the 4-hour chart, where each candle represents price action for a four-hour period. This 4-hour chart interval is popular in the 24/7 crypto market, allowing traders to analyze and predict short-term price movements. Bitcoin's 4-hour chart mirrors the Bollinger bandwidth pattern observed in XRP.

The long-held belief is that tighter Bollinger bandwidth, reflecting a quiet period in the market, is akin to a compressed spring ready for significant movement. During these calm phases, the market accumulates energy that is eventually released once a clear direction is established, often leading to dramatic rallies or sharp price declines. Both XRP and bitcoin surged in November-December following an extended range-bound period that left their bandwidth at levels comparable to those observed today.

Ask Aime: What does the current Bollinger Bandwidth tightening in XRP and BTC signal for the market's future?

However, tighter bands do not always indicate a bullish volatility explosion; they can also foreshadow a sell-off. For example, the bands tightened in October 2022, signaling a significant move ahead, which materialized on the downside after FTX went bust. It remains to be seen whether this latest spring compression will trigger bullish volatility or lead both tokens into a tailspin. The recent hawkish comments from Federal Reserve's Chairman Jerome Powell and selling by some whales favor the latter.

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WellWe11Well

04/20

Fed's Powell throwing cold water with his comments. Might squeeze the crypto market more than a tight Bollinger Band.

Darkness297

@WellWe11Well Think the market's gonna dump?

mrpoopfartman

Bollinger Bands tight, volatility incoming, brace for impact

Assistantothe

@mrpoopfartman Think it's gonna pop or dump?

Particular-Ad-8433

Whales dumping, market's nervous. I'm holding $XRP long-term but trimming a bit. Can't fight the Fed forever.

breakyourteethnow

@Particular-Ad-8433 How long you been holding XRP? Any specific target in mind?

Turbonik1

Bollinger Bands tightening like my patience in this sideways market. Ready to SNAP and send $XRP and $BTC on a wild ride. 🤔

alecjperkins213

XRP and BTC: loaded springs ready to pop

BetterPlayerTopDecks

@alecjperkins213 Agree, could be big moves.

pais_tropical

@alecjperkins213 Ready to pop soon?

the_doonz

Holding $BTC, waiting for breakout or crash. 🤔

yeahyoubored

@the_doonz How long you been holding BTC? Any specific target in mind for the breakout?

rw4455

Fed's Powell throwing cold water. Might see a sell-off instead of a rally. Bears are licking their lips.

racoontosser

@rw4455 What's your take on XRP?

AkibaSok

Traders on edge with these narrow bands. It's like waiting for a lightning strike. Keep your stop-loss tight.

joaopedrosp

Fed's Powell throwing cold water, watch for sell-offs

Jimmorz

XRP and BTC are at the top of the rollercoaster hill; the Fed's comments are the push. Will it be a thrilling ride up or a plunge down? The market's poised for a wild ride, and only time will tell the direction.

Big-Decision-1458

Crypto's volatility is like a reality TV show. You never know what's coming next, but it'll be dramatic. 😂

Shadushio

@Big-Decision-1458 If crypto's a reality show, then traders must be the contestants on a never-ending season of "Survival of the Fittest." 📺💼

Inevitable-Candy-628

Crypto whales selling? That's bearish news. But remember, every big sell-off has been followed by a rebound. Keep your eyes on the prize.

Nichix8

@Inevitable-Candy-628 What’s your take on the Fed’s impact?

@Inevitable-Candy-628 True, every dip's followed rebounds.

GoStockYourself

Hodling some $XRP, planning to buy the dip if it happens. Not scared of volatility, scared of missing out.

foo-bar-nlogn-100

XRP and BTC's Bollinger Bands are tight like a fresh new sneaker's box. Get ready for a pop or a drop. 🤔

Oleksandr_G

Remember 2022? Tight bands led to a crash. Don't get caught off guard. Prepare for either scenario.