ETF outflows and extreme Bollinger Bands: Bitcoin braces for record volatility

Bitcoin fell nearly 4% in October, ending the month with a record decline in Bollinger Bands volatility, while ETF outflows continue to weigh on the price.

BTC/USD 1-day chart. Source: Binance

Bitcoin has recovered to above $110,000 since its last decline on October 30, but traders remain pessimistic after Uptober fell short of expectations. The price decline was accompanied by activity on both US exchanges and spot Bitcoin ETFs.

Capital flows into US Bitcoin ETFs. Source: Farside Investors

Data from UK-based investment firm Farside Investors showed that outflows totalled $191 million on October 31, following $488 million in outflows the previous day.

Blockchain analytics platform Glassnode said the ETF outflows highlight “growing selling pressure from traditional finance investors and new weakness in institutional demand.”

Continuing its analysis, Glassnode noted that markets ignored the macroeconomic tailwind in the form of interest rate cuts by the US Federal Reserve.

“The Fed delivered the expected rate cut, but the hawkish tone for December has dampened optimism,” the platform told its X followers on social media. “The initial rally has faded as traders have shifted to caution—a shift that has clearly been reflected in the BTC options market.”

Traders are cautious. Crypto investor and entrepreneur Ted Pillows called Bitcoin's current situation a “temporary capitulation.”

“A temporary capitulation of BTC is currently underway. However, to avoid it, Bitcoin needs to consolidate above $100,000,” he warned.

BTC/USD 2-Day Chart. Analysis by Ted Pillouse

Bollinger Bands Record Record Low BTC Volatility

Analyst Matthew Hyland noted that the Bollinger Bands volatility indicator points to record volatility approaching.

“Bollinger Bands on the monthly timeframe have reached the most extreme levels in Bitcoin's history,” he wrote on social media.

BTC/USD 1-Month Chart. Analysis by Matthew Hyland

The narrowing of the Bollinger Bands has been on the radar of market participants for some time. Last month, the indicator's creator, John Bollinger, stated that it was “time to pay attention” to the upcoming volatility in both Bitcoin and major altcoins.

Source: cryptonews.net