Squeeze Indicators
Squeeze indicators are technical tools designed to identify periods of low volatility that are likely to be followed by a sharp, directional price move. These indicators often monitor the relationship between moving averages and volatility bands to detect when price action has become overly compressed.
When a squeeze is detected, it signals that the market is coiling, building potential energy for a breakout. Traders use these indicators to anticipate the end of a consolidation phase and prepare for increased market activity.
In crypto, squeeze indicators are particularly valuable for catching major trend shifts early. They help traders avoid being caught off guard by sudden volatility spikes.
By providing a clear signal of when a market is transitioning from a range to a trend, these tools are essential for timing entries and exits effectively. They are a core component of many volatility-based trading systems.