Ether-Bitcoin 'Squeeze' Points to Coming Volatility Ahead of Ethereum Pectra Upgrade

Ethereum's Pectra upgrade, scheduled for May 7, aims to improve scalability and may impact market activity.

Author: Omkar Godbole | Edited by: Parikshit Mishra Updated: May 5, 2025, 8:27 AM Published: May 5, 2025, 8:22 AM

What is important to know:

• Bollinger Bands on the ETH-BTC chart are at their tightest levels since June 2020, which could indicate a possible increase in volatility.
• Ethereum's Pectra upgrade, scheduled for May 7, aims to improve scalability and may impact market activity.

Crypto traders looking to profit from the expected surge in volatility should pay attention to the Ether to Bitcoin (ETH/BTC) ratio on the Binance platform, which could soon experience sharp fluctuations, according to the important Bollinger Bands indicator.

Bollinger Bands are volatile boundaries located two standard deviations above and below the 20-day simple moving average of an asset's price.

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The process of Bollinger Band Squeeze occurs when the bands are tightly squeezed around the price, indicating low volatility and a period of consolidation. During this time, the market tends to accumulate energy that is eventually released in either direction, causing a sharp increase in volatility.

According to TradingView, the Bollinger Bands on the ETH-BTC chart are now at their tightest levels since June 2020.

The squeeze signals that Ethereum may soon experience increased volatility against BTC. Traders are paying close attention to the direction in which the price breaks out of the bands, as significant movement often occurs in the same direction.

The increase in volatility is a result of Ethereum's Pectra upgrade, which aims to improve the scalability of the blockchain and validator operations, which could help boost market activity.

The upcoming upgrade, scheduled for May 7, significantly increases the maximum amount of ETH a validator can offer, from 32 ETH to 2,048 ETH. It also doubles the number of “blobs” of data per block from 3 to 6, allowing for a maximum of 9. Additionally, the upgrade kicks off the transition to the EVM Object Format (EOF), a new structure designed to improve the efficiency of smart contracts.

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