Bitcoin’s Bollinger BandWidth has recently reached new lows, generating a bullish signal reminiscent of a 2023 price surge. This indicator offers optimism for traders, suggesting a potential increase in BTC’s value toward the year’s end.

Key Highlights:

• The Bollinger BandWidth indicator may lead to a price rally reminiscent of past surges.
• BandWidth maintained above critical levels despite recent downward price movements.
• Traders are seeking confirmation of a sustained market recovery.

Potential for a ‘Parabolic Leg Up’

On Wednesday, macro strategist Gert van Lagen highlighted a significant trend from Bitcoin’s Bollinger BandWidth. This indicator evaluates the gap between the upper and lower Bollinger bands, which serve as precursors for BTC price volatility.

Data from sources such as Cointelegraph Markets Pro and TradingView shows that the divergence has hit all-time lows.

Historically, this indicator rarely drops below 100, and when it does, it is often followed by significant price movements. As Van Lagen remarked, “Historically, every time this triggers, Bitcoin follows with a direct parabolic leg up.”

BTC/USD one-month chart with Bollinger BandWidth data. Source: Cointelegraph/TradingView

The most recent bullish signal surfaced in November, leading to a doubling of BTC/USD within four months. Van Lagen anticipates that this setup closely mirrors GOOGL’s behavior prior to the 2008 financial crisis.

Concerns About Market Strength

Despite recent bullish signals, many Bitcoin traders are uncertain about the market’s stability. On Wednesday, BTC/USD peaked at levels not seen for two weeks, nearing $94,000 amid speculation regarding a pro-crypto US Federal Reserve chair.

As noted by trader Daan Crypto Trades, although the market structure appears bullish, traders are encouraged to wait for control above the current price ranges before celebrating the positive trend.