Indicator Overview
The Bitcoin Futures Volatility Bands (BFVB) indicator analyzes Bitcoin's futures market activity by tracking the daily percentage change in open interest. By applying statistical analysis, the indicator generates upper and lower volatility bands that reflect historical fluctuations.
Calculating the standard deviation of these daily changes, the BFVB identifies extreme conditions in the futures market, highlighting when open interest is unusually high or low compared to historical norms.
Disclaimer: Due to the way OI is calculated, this indicator is susceptible to repainting.
How To Use This Indicator
When the BFVB oscillator hits the top range, investors should proceed with caution and consider taking profits.
Upon hitting the bottom range however, investors are good to consider entering a position.
Created By
Alpha Extract in May 2024