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Momentum & Indicators

Bollinger Bands

Bollinger Bands are two lines drawn a set number of standard deviations above and below a moving average, widening when volatility rises.

The standard version uses a 20-day average with bands two standard deviations away. About 95% of closes fall inside them if returns were normally distributed, which they are not in crypto, so touches of the bands are more common than the maths suggests.

A squeeze, when the bands narrow, shows volatility is low and is often followed by a bigger move in an unknown direction. Read the Bollinger Bands guide.

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