Analyst Merlijn The Trader highlighted that Bitcoin’s volatility compression appears complete, calling it a “volatility reset” that historically precedes massive upward moves.
His chart, which tracks weekly Bollinger Bands, shows three major expansions in the current cycle, 88%, 183%, and 86% pumps, each triggered after volatility bottomed. The latest setup, now flashing a fourth signal, could mark the beginning of another large expansion phase.
Merlijn noted that the prior volatility squeezes all led to multi-month rallies, often catching traders off-guard after extended consolidation. With Bitcoin currently hovering near $102,000, he expects the next move to be significant, though directionally dependent on upcoming macro and ETF flow data.
RSI Oversold Levels Mirror April Setup
Adding weight to the bullish case, Bitcoin Archive pointed out that Bitcoin’s daily Relative Strength Index (RSI) has hit its most oversold level since April. At that time, Bitcoin rebounded 70%, rallying from $74,000 to $126,000 within weeks.
Historically, such RSI levels have signaled exhaustion among sellers and the start of renewed accumulation. While short-term sentiment remains cautious following a $250 billion crypto market wipeout this week, technical setups suggest conditions are aligning for a relief bounce.
Pattern Consistency Points to a Larger Cycle Move
The overlap between low volatility, compressed price structure, and extreme oversold readings has preceded major Bitcoin expansions in every previous instance since 2023. Both analysts emphasize that this current phase, while unnerving for traders, often marks “the calm before the breakout.”
If history repeats, Bitcoin could be preparing for another triple-digit percentage move once volatility expands and demand flows return through ETFs and institutional desks.