BTC Squeezes Bollinger Bands: Will It Rally to $126K or Crash to New Lows?

The past week has been unusually calm for Bitcoin, but an important indicator suggests that major turbulence could be approaching. The Bollinger Bands, a technical indicator developed by John Bollinger in the 1980s, have squeezed to their narrowest point since October 2023.

This setup previously preceded a 330% rally over two years, culminating in Bitcoin's all-time high above $126,000. However, the direction of this potential move remains uncertain, as squeezing the bands typically foreshadows a big move but provides no clarity on whether it will be a rally or a pullback.

In March 2023, the Bollinger Bands tightened to a level never seen before, and days later Bitcoin tumbled from around $75K to approximately $65K. On the other hand, in May 2025, the crypto community witnessed the opposite reaction, with the asset soaring beyond $110,000 after the bands squeezed.

The recent Consumer Price Index data release has also sparked analyst discussions about potential volatility for BTC. Some analysts pointed out that each CPI report from August last year until now has been a precursor to severe turbulence and was sometimes followed by a double-digit price crash for Bitcoin.