Volatility compression is one of the most telling signals in technical analysis. Just look at ZEC's recent performance — this guy is currently in a state of historically low volatility, appearing very stable, but this "calm" often signals that something is about to happen.

How exaggerated is the Bollinger Band narrowing? Currently, ZEC's Bollinger Band width is only $22, hitting a new low since October 2025. In other words, volatility has been compressed to the limit. According to historical data, whenever the Bollinger Bands narrow to this extent, there is a 70% probability that the next 3-5 trading days will see directional moves exceeding 15%. Sounds good, right? But the premise is that you need to understand how to trade.

ZEC's volatility also exhibits a clear cyclical pattern. The low-volatility state has lasted about two weeks. Historically, similar cycles usually take 12-18 trading days to complete a full cycle. We are now approaching the end of this window. Plus, liquidity tends to be unstable at the end of the year, which means that once a breakout occurs, the magnitude could be amplified.

But there's a trap — breakout signals in low-vol environments are often misleading. To catch genuine breakouts, you can't follow blindly; strict conditions are required: the price must break through a key resistance level by more than 3%, volume must increase to 150% of the average, and the breakout must be maintained above the line for at least 4 hours. For example, at the $546 resistance level, a breakout is only valid if these conditions are met.

How to manage positions reliably? Since we are in the late stage of low volatility, exploratory position building is a wise choice: start with 30% to test the waters, add 40% after confirmation of the breakout, and keep the remaining 30% as a reserve. This way, even if your judgment is wrong, you won't be caught off guard all at once, and you still have room to chase the trend.