From Compression Comes Expansion

Technical analysts often say, "From compression comes expansion."

In other words, as markets become more coiled, buyers or sellers are ultimately forced to front up. This period of shrinking volatility is often met with violent unwinds - in either direction.

So when we see these periods of notable reductions in volatility, pay attention because the resolution often sets the tone for weeks and months to come.

Just take a look at how tight the Bollinger Bands have become in Bitcoin:

Through this measure, volatility is at its lowest point since October last year...