Bitcoin (BTC) may be approaching a major breakout after a key volatility indicator reached its lowest level in nearly three years, a setup that previously preceded one of the cryptocurrency’s strongest rallies on record.
The latest Bitcoin technical analysis shows that the Bollinger Band Width (BBWidth) indicator has compressed to its narrowest level since October 2023.
The setup is notable because the last time BBWidth reached similarly low levels, Bitcoin entered a powerful expansion phase, rallying more than 330% between October 2023 and October 2025.
Over recent months, the Bollinger Bands have tightened significantly around Bitcoin’s price, pushing BBWidth, which measures the distance between the upper and lower bands, to its lowest level since late 2023.
Historically, such periods of compressed volatility often precede major price moves, although they do not indicate direction.
The analysis identified two major BBWidth compression periods. The first occurred in October 2023 and was followed by a multi-year rally. The second is unfolding now, with Bitcoin trading in the $60,000 to $70,000 range.
Notably, a Bollinger Band squeeze often signals that a period of low volatility is ending. The current squeeze is among the tightest in Bitcoin’s recent history and closely resembles the setup seen in October 2023.
With volatility at an extreme low, focus is on a breakout that could trigger Bitcoin’s next major move.
Bitcoin potential crash to $41,000
Meanwhile, a separate analysis by TradingShot, shared in a TradingView post on August 12, indicated that Bitcoin remains at a critical technical juncture despite the bullish volatility signal.
According to the analysis, Bitcoin has spent the past month consolidating above its 50-day moving average, which has acted as near-term support.
However, the 100-day and 200-day moving averages continue to converge from above, creating a major resistance zone that has capped rallies throughout the current bear cycle. Bitcoin has traded below both moving averages since November 2025.
A decisive breakout above this resistance cluster could strengthen the case for a new upward trend. However, failure to clear the zone may trigger another bearish leg lower.
To that end, TradingShot identified $50,000 as a potential downside target by early October, while a deeper decline toward $41,000 is viewed as a more extreme scenario.
Bitcoin price analysis
By press time, Bitcoin was trading at $63,631, down about 0.5% over the past 24 hours. On the weekly timeframe, the cryptocurrency was also modestly lower, shedding 0.8%.
At the current price, Bitcoin is trading slightly above its 50-day SMA of $63,375, indicating that short-term support remains intact. However, it remains below the 200-day SMA at $70,172, suggesting the broader trend is still bearish until that level is reclaimed.
Meanwhile, the 14-day RSI stands at 54.17, reflecting neutral momentum with a slight bullish bias. The reading suggests there is still room for movement in either direction, with neither buyers nor sellers firmly in control.
Featured image via Shutterstock
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