Bollinger Bands
Three lines showing volatility: 20-period MA + 2 standard deviations.
Bollinger Bands compress in low volatility (Squeeze), expand on breakouts. Touching upper = potential overbought, lower = oversold. Squeeze precedes big moves but not direction.
In plain words
Three lines on a price chart: middle is the 20-bar average, upper and lower mark the typical volatility range. When the bands squeeze tight, volatility is very low. This is often a precursor to a big move in some direction. Price touching the upper band often signals short-term overheating.
Example
BTC Aug 2024: 3-week Bollinger Squeeze at 58-61k. Sep 12 breakout → 73k in Nov (+25%).
Also known as: BB, Bollinger, wstęgi, smugi