A classic metric suggests that Bitcoin (BTC) may see a new reversal as BTC price strength reclaims key levels.
In an X (formerly Twitter) Post On September 18, John Bollinger, creator of the Bollinger Bands volatility indicator, said that Bitcoin was ready for a breakout decision.
Bitcoin Bollinger Bands Eyeing a “Walk Up”
After hitting new September highs a day earlier, Bitcoin is challenging resistance levels that have been out of reach since mid-August, data from Cointelegraph Markets Pro and TradingView shows.
For Bollinger, the signs for the largest cryptocurrency are encouraging. Bollinger Bands uses the standard deviation around a simple moving average to determine both potential price range and volatility.
Currently, BTC/USD is placing daily candles that touch the upper band. When this happens, it may signal an imminent reversal in the central band or, conversely, an inward fit of reversal volatility.
The narrow Bollinger Bands recently seen on Bitcoin lends credence to expectations that the latter scenario will now play out.
“And the upper Bollinger Bands got their first tag after a new set of control bars were installed on the lower bands,” Bollinger commented alongside a chart.
“The question now is can we move up to the upper band? It is too early to answer now.”
BTC/USD 1-day chart with Bollinger Bands. Source: TradingView
Cointelegraph reported a contraction of the bands in July – an event that occurred before ultimately returning to lower levels.
BTC Price Reset “Fairly Fair”
Bollinger characterizes the current mood among experienced Bitcoin traders and analysts on shorter time frames.
Related: FOMC vs. BTC Price ‘Local Bottom’ – 5 Things to Know in Bitcoin This Week
Despite the strength seen this week, caution is being exercised as various trendlines that previously served as support remain above the spot price.
Discussing the situation, on-chain monitoring resource Content Indicator asked X clients to question the bullish momentum.
“We have heavy technical resistance at the key moving averages and support at the LL,” said one section of the commentary.
“It’s very possible that we circle the range, and if we’re lucky we’ll see valid tests of the R/S levels that will give us some clarity on where BTC goes from here before the end of the week.”
Physical indicators referenced the upcoming United States Federal Reserve decision on interest rates, which could generate sudden volatility and unreliable short-term trading signals.
UPDATE 2: As mentioned earlier, it appears #B T c Bulls are gaining some momentum, but things are not always what they seem. Let me explain…
Shortly after the close/open of last night’s candle we have seen a new Trend Precognition ⬆️signal develop on the daily chart and now we have a new… pic.twitter.com/V0UI7JznKf
– Content Indicator (@MI_Algos) 18 September 2023
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This article does not constitute investment advice or recommendations. Every investing and trading move involves risk, and readers should do their own research when making decisions.
Source
Source: cryptosaurus.tech
