Bollinger Bands are part of the technical trend indicators. The upper and lower bands are calculated based on the price volatility around the moving average of the past prices. We use the simple moving average of 20 periods and 2 standard deviations for the calculation of the upper and lower bands.
Generally speaking, when the market is calm the upper and lower bands tend to contract, when the market is more active the two bands tend to expand. Some traders believe that the prices tend to return to the middle band, much more so in periods when the market is moving sideways.
Relative Strength Index (RSI)
The RSI (Relative Strength Index) is an indicator that tries to measure the strength of supply and demand at all times. The RSI is expressed as a percentage, i. e. it is an oscillator that moves between zero (zero percent) and one hundred (hundred percent), with fifty (fifty percent) being the neutral zone. When the RSI is close to the upper limit of one hundred percent, the demand might be disproportionate in relation to the supply. When this situation occurs, the stock is said to be overbought and it could be a sell signal. On the other hand, if the RSI approached the lower limit (zero percent) the coin could be oversold, which could be interpreted as a buying signal.
Average True Range
The ATR (Average True Range) is an indicator that tries to measure price volatility. The ATR helps you estimate how much the price of a coin might go up or down per day. As a volatility indicator, such as the Bollinger Bands, the ATR does not predict the direction or duration of a trend, but rather measures activity and market volatility.
High ATR values indicate high activity in the market and, therefore, high volatility. Very high values occur as a result of a large rise or decrease in prices. Long-term low ATR values could indicate price consolidation and may be the starting point or continuation of a trend.