Can history repeat itself? Key indicators of Bitcoin may signal a new round of pump.

Gate News bot message, a key indicator suggests that the price of Bitcoin may soon become more volatile, potentially driving the next pump.

The indicator is based on the gap between the Bollinger Bands. Note: Bollinger Bands are a volatility band located two standard deviations above and below the 20-week simple moving average of Bitcoin prices.

When the gap widens, it indicates that the market is more active and volatile. Historically, this phenomenon is observed before a significant rise in Bitcoin. When the gap narrows, it indicates that market activity decreases.

The gap, also known as the Bollinger band spread, may soon widen, which is a positive signal for bulls, as the MACD histogram associated with this gap has turned positive. Historical data shows that the positive crossover of the MACD typically precedes a significant bull market for Bitcoin.

BTC weekly chart (Source: TradingView/CoinDesk)

The upper pane displays the weekly opening price, highest price, lowest price, and closing price of Bitcoin in candlestick chart format (based on UTC time )), the middle pane shows the price difference, which is the gap between the Bollinger Bands, and the lower pane associates the MACD with the price difference.

The MACD has now turned positive, indicating that the price spread or volatility will expand again. By default, volatility is independent of price, meaning that the upcoming activity could be bullish or bearish.

By closely observing the above chart, you will notice that the previous positive crossover of MACD (marked by vertical lines) foreshadows significant bull markets, including the price rebounds at the end of 2020 and the end of 2024. Will history repeat itself? Let's wait and see.

Source: CoinDesk