Most explosive Bitcoin signal just appeared on the monthly chart

Although things may not look as optimistic in the cryptocurrency market in the last couple of days, a technical analysis of Bitcoin (BTC)’s long-term price chart is pointing towards a potentially massive move, and historical precedent heavily favors the bulls.

Specifically, the monthly Bollinger Bands for Bitcoin have reached their tightest, most constricted level in the asset’s entire history in a phenomenon called a ‘squeeze,’ which has historically been a powerful precursor to significant price breakouts, per an analysis by crypto analyst Matthew Hyland on October 16.

As it happens, the Bollinger Bands indicator, created by John Bollinger, plots a moving average (MA) with two volatility bands above and below it. When the bands tighten, it signifies a period of exceptionally low volatility, which often acts as a coiling spring for the next major price movements.

Historical precedent of explosive growth

Indeed, according to Hyland, “every single band expansion in its history has led to higher prices by the time it completed.” This means that whenever Bitcoin’s monthly Bollinger Bands have been this tight before, the subsequent expansion when the volatility returned has always resulted in the price reaching a new, higher level.

Notably, past instances of these extreme squeezes on the monthly chart have preceded some of Bitcoin’s most legendary bull runs, including the moves that led to the 2017 and 2021 all-time highs (ATHs). In other words, the current period of consolidation and uncertainty may not be a sign of weakness, but rather a gathering of energy before a powerful upward trend.

Meanwhile, a fellow crypto trading expert, Michaël van de Poppe, seems to be on the same page, observing that BTC’s monthly chart is “pretty much fine, no peak, no bear market, no excessive vertical charts,” adding that “there’s nothing to worry at this point” and that this could be the time to “buy the dip.”

For the time being, the flagship decentralized finance (DeFi) asset is trading at $111,161.79, recording a daily drop of 1.27%, losing 8.81% across the previous week, and accumulating a decline of 3.75% over the past 30 days, according to the most recent price data.

Overall, the above technical charts are a good reason for optimism, aligning with significant institutional interest for Bitcoin that has seen more than 1 million BTC concentrated among 172 firms, according to Bitwise Asset Management’s recent Q3 Corporate Bitcoin Adoption Report.