Does the narrowing of Bollinger Bands in technical indicators signal an impending price breakout? Bollinger Bands, a popular tool in market analysis, measure volatility by plotting bands around a moving average. When the bands tighten, it often indicates a period of low volatility, suggesting that the price is consolidating. Historically, such squeezes precede significant price movements, as pent-up energy in the market seeks release. Traders interpret this as a potential breakout signal, though the direction—up or down—remains uncertain without additional context like support, resistance, or momentum indicators. For instance, a breakout above the upper band with strong volume might suggest a bullish surge, while a drop below the lower band could hint at a bearish decline. While not foolproof, the narrowing of Bollinger Bands remains a key clue for anticipating explosive price action.