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August 15, 2022
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Bitcoin: Bands indicate the biggest change of 2021 is near

According to the Bollinger Band Width, volatility is about to explode. In the past, this has resulted in substantial upward movements. However, these movements have decreased in size, increasing the chances of reversal. Here is a closer look at what the Bollinger Bands technical analysis indicator says about the current price action and what can result when tranquility breaks.

The width of the Bollinger Bands warns of massive Bitcoin movements, but in which direction?

The price of Bitcoin is being traded around $ 58,000, unable to rise as its altcoin brothers begin to rise above the previous highs of 2021. The powerful trend cryptocurrency has more than doubled in 2021 so far, just an entire quarter in the year.

Another huge change may be coming, however, and one that should have a strength similar to that of the initial breakdown above $ 20,000. This increase had an increase of more than 134% before things subsided, but it was followed not by one, but by two more bullish impulses.

Boost number two was less powerful, but it still added more than 88% to the price per coin. The third impulse after a retraction was even smaller, at around 35%. Between each impulse there was a narrowing of the Bollinger Bands, also called “squeeze”. When things get so tight, energy is released and volatility increases. The bands increase as a result.

The Bollinger Bands are now at the best level since $ 20,000 was won. A clearer view of how Bitcoin is close to a similar “squeeze” is even more obvious in Bollinger’s bandwidth indicator at the bottom of the graph below.

A tightening of the Bollinger Bands to the tightest since $ 20,000 could lead to a big change | Source: BTCUSD at TradingView.com

What else does the Bollinger Bands technical indicator say about the running of the bulls?

Bollinger bands are used to measure volatility, as well as a number of other functions. It can detect trend reversals when trends are strengthening, find support and resistance and much more. Most trades take place within the bands, however, when Bitcoin burst and closes above it with volume, the cryptocurrency “Curves of the Bands” gets higher.

There are several other strategies related to the tool. Recently, the indicator’s creator, technical legend John Bollinger, warned that the tool may be signaling that Bitcoin was forming a hedge pattern called “Three Pushes Up.”

Bollinger Bands
Is the upper cryptocurrency forming a “Three impulses to bullish” pattern? | Source: BTCUSD at TradingView.com

The potential reversal pattern is classified as having three distinct peaks, both in the share price and in the% B indicator. The Bollinger bandwidth also decreases as the trend weakens. Finally, not illustrated, the BBTrend tool should decrease for confirmation.

Bollinger, who regularly warns the community when “it’s time to pay attention,” says crypto investors may need to prepare for the potential for a short-term top. Again, it seems, it’s time to pay attention.

Source: BitcoinIst

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