›   Bitcoin Charts   ›   Bitcoin Bollinger Bands Chart

Bitcoin Bollinger Bands Chart

Loading chart... (uses JavaScript)

Understanding Bollinger Bands in Bitcoin Trading

Bollinger Bands are a technical analysis tool that was invented by John Bollinger in the 1980s. They are used to measure the volatility of a financial asset, like Bitcoin, over a specified period of time. Bollinger Bands comprise three lines: a middle band representing a simple moving average (typically 20-day), and two outer bands that are standard deviations away from the middle band.

Here are the key components of Bollinger Bands:

Middle Band:

The middle band is a simple moving average (SMA) of the asset's price over a specific period, usually 20 days.

Upper Band:

The upper band is calculated by adding two standard deviations to the middle band, which measures the asset's volatility.

Lower Band:

The lower band is calculated by subtracting two standard deviations from the middle band.

Bollinger Bands expand and contract based on the volatility of the asset. When the bands expand, it indicates an increase in volatility, while contraction suggests a decrease in volatility. Traders use Bollinger Bands to identify potential overbought or oversold conditions in the market. For instance, when Bitcoin's price touches or goes beyond the upper band, it could be overbought, and when it touches or dips below the lower band, it could be oversold.

Related Charts

Article Sources

BuyBitcoinWorldWide writers are subject-matter experts and base their articles on firsthand information, like interviews with experts, white papers or original studies and experience. We also use trusted research and studies from other well-known sources. You can learn more about our editorial guidelines.

  1. Britannica Money - Bollinger Bands: A powerful technical tool for traders, https://www.britannica.com/money/bollinger-bands-indicator

About the Author

jordan tuwiner

Jordan Tuwiner is the founder of BuyBitcoinWorldwide.com. He studied computer science at Towson University and holds an online degree in trading & cryptocurrency. Jordan has been writing about Bitcoin since 2015. His work has been featured in The Guardian, International Business Times, Forbes, VentureBeat, CoinDesk and many other top Bitcoin media outlets.

Get Bitcoin charts, data and stats with Bitbo.