Indicator Overview

The Volatility Pulse indicator measures volatility dynamics by comparing short-term average true range (ATR) to a longer-term ATR baseline, standardising the result through a z-score calculation. The z-score highlights deviations from typical volatility behaviour, signalling periods of abnormal activity. The colour gradient enhances interpretation by mapping volatility intensity onto a spectrum from subdued to heightened states.

Designed to provide early warning of volatility surges or contractions, this tool supports timely decision-making in risk management and trade execution. Its statistical normalisation makes it effective for identifying shifts in market regimes.

How To Use

The Z-score fluctuates around zero, with values above 2.0 signaling heightened volatility, often preceding sharp Bitcoin price swings, ideal for scalping or preparing for breakouts. Values below -2.0 indicate subdued volatility, suggesting consolidation and opportunities for position building. The gradient area chart, transitioning from teal (low) to gold (high), vividly maps volatility surges. Traders can initiate trades on threshold breaches or monitor for trend confirmation. Investors may accumulate during low-volatility lulls and exercise caution during high-volatility spikes, aligning with Bitcoin’s cyclical price dynamics for strategic timing.