Bollinger Bands Explained — Volatility & Squeeze Trading
The Relative Strength Index (RSI) is a momentum oscillator that measures how fast and how much a crypto price has moved. It is one of the most popular indicators for spotting overbought and oversold conditions.
What Bollinger Bands measure
Bollinger Bands are a moving average (usually 20 period) with two bands at ±2 standard deviations. They expand when volatility rises and contract when it falls.
The squeeze
A squeeze — bands pinched tightly together — means low volatility and often precedes a sharp move. The direction of the breakout sets the trade. Not every breakout continues, so wait for a close outside the band.
Mean reversion
Price tagging the upper or lower band can act as a reversion signal back to the middle line. This works best in ranges and fails in strong trends, where price can 'walk the band'.
Combining with volume
A squeeze breakout on rising volume is far more trustworthy than one on flat volume. CryptoTA shows volume directly under the price chart.
What Bollinger Bands measure on a live chart — free
CryptoTA lets you add RSI (and 15 more indicators) to a live Binance chart with one click — no signup, no install.